Real estate appraisal is the process of estimating the market value of a property. An appraisal can be used by lenders, other real estate professionals, attorneys, accountants, property owners, fiduciaries, and others for loan underwriting, real estate transactions, estate planning and settlement, disputes, asset management, decisions making purposes, etc. Appraisers must follow a set of standards, as outlined by the Uniform Standards of Professional Appraisal Practice (USPAP). In addition, appraisers conform with codes of professional ethics and standards of professional appraisal practice of professional organizations such as the American Society of Farm Managers and Rural Appraisers, the Appraisal Institute, etc.

To begin the appraisal process, an appraiser will schedule time to tour the property. While there, the owner or owner’s representative will be interviewed, the characteristics of the real estate will be observed, the property will be photographed, and the improvements will be measured. In addition, the neighborhood and surrounding market area will be inspected by the appraiser.

Once back in the office, the appraiser will:

• analyze the collected data
• research and confirm comparable sales, rents or cost data
• directly compare the confirmed sales, rents or cost data to the subject property based on characteristics that can have an impact on value
• estimate the market value of the property by the appropriate approach to value (Cost Approach, Sales Comparison Approach, Income Capitalization Approach)
• and prepare the appraisal report, which most often is in a narrative report format