Real Estate Appraisal or land valuation is a process where a person develops an opinion of value for property. Real estate transactions will often need an appraisal because they do not happen regularly and each property is very unique, especially when it comes to condition which is a key factor in finding the value of the property, unlike the corporate stock, which is daily traded and are identical. The location of the property will also play a key part in finding the value of the property. However, because property can’t change location, it is often upgraded or improved on so that the value of the property may be changed. Appraisal reports will help to form a basis for a mortgage loan, settling an estate and divorce, value of property taxes and so on. There are times where an appraisal report is used to determine the sale price for the property.
Besides the educational grade which is mandatory, which may vary from construction technology to finance, but not all countries will require an appraiser to have a license to appraise property. Normally, the real estate appraiser will have an opportunity to go through 3 levels of certification. You have Appraisal trainee, licensed appraiser, and then certified appraiser. The last 2 levels of licensing require no less than 2000 experience hours within 1 year or 12 months, and 2500 experience hours in less than 24 months. The appraiser is known as a property value and in Britain they are called valuation surveyors. If the opinion of the appraiser happens to be based on the market value, then it must also be based on the best use and highest property. In the U. S. mortgage valuation of an improved property is normally reported on a standardized form such as the Uniformed Residential Appraisal Report. Appraisals for a commercial property are often reported in the narrative format and completed by a certified appraiser.
The practice of appraisals within the United States is actually regulated by state. The Appraisal Foundation is the main body of appraisals followed by the Appraisal Standards Board regulated and updates the best practices within USPAP or Uniform Standards of Professional Appraisal Practice while the qualifications board regulate the minimum standards for licensing and certification for appraisers.
The central government directs appraisers in a roundabout way in light of the fact that if the Appraisal Subcommittee of the Federal Financial Institutions Examination Council finds that a specific state’s appraiser control and accreditation program is deficient, at that point under elected directions all appraisers in that state would never again be qualified to lead evaluations for governmentally sanctioned banks. The ASC supervises the TAF. Banks make far reaching utilization of home loan credits and home loan upheld securities, and would be not able do as such without examinations.
The 1989 Financial Institutions Reform, Recovery, and Enforcement Act requested every one of the states to create frameworks for authorizing and confirming land appraisers. To fulfill this, the Appraisal Subcommittee was shaped inside the FFIEC, with agents from the different Federal home loan administrative agencies. Thus, at present all the land appraisers must be state-authorized and guaranteed.