The appraisal process has been used widely to determine what a property is valued at in a given time by appraisal experts. The term appraisal is used very much when to comes to residential, commercial and apartments. The property appraisal process is mainly carried out so as to determine how much a property is worth before disposing it off. The process of estate appraisals been mainly carried out to determine how buildings and other resources in an estate have deprecated since construction. Valuation of property requires individuals with valuation skills who have professional training and experience I the appraisal field.
The appraisal process is normally carried out to determine the value of a property. The valuation process is carried out to determine the market value, the value-in-use and finally the investment value. Market value simply refer to the price at which certain property would be traded for at a competitive market setting. The term market price has also been used to refer to the estimated amount which an asset or liability should be exchanged on the valuation at a given time. The valuation at a given date Is dependent on what buyers are willing to offer for a given property.
Another type of value determined by the appraisal is the use value. The use value is also referred as the net book value. The use value has been used to described the cash flow that a given asset generates to a specific owner when it is utilized. The use value is not predictable as it has at times been recorded to be above the market and at times to be below the market value. The last value which is determined by the appraisal process is the investment value. Investment value is easily determined during the appraisal process as it refers to the value a certain investor has invested in a given property.
The investment value is always above the market value. There are other minor values which are determined by appraisal process which include the insurable and liquidation values. Insurance and liquidity values are not very much significant as the market, value in use and investment values.
The process of determining the value of properties is carried out through various methods some of which include sales comparison approach, the cost approach and lastly the income approach. The determination of a asset value through the sales comparison approach involves determining the value of a given property by comparing it to similar properties which have been sold in the near future. The cost approach method takes into consideration what price a buyer is willing to offer and it should not be above the current market prices..