What is a Real Estate Appraiser or Appraiser by Sky Marketing?
By Space Coast Daily // December 20, 2020
An appraisal is an objective and impartial opinion, expressed by an authorized person on the value of movable or immovable property, on the rights or interests of owning the itself, or root (“real property”). These rights are established in the constitutions of the United States of North America, Puerto Rico and in most of the countries, to which He calls them the bundle of rights or “bundle of right”.
The appraisal is done for a purpose, which is usually to establish a valuation economic of a movable or immovable property, with a view to solving a legal problem, financial, economic or personal to a specific effective date.
The date is important, since real estate is subject to internal changes that occur in the property and factors external factors that affect them, positively or negatively, on the value of these.
The appraisal process begins with the definition of the valuation problem and ends with the reconciliation. This is the last chance the appraiser has to reach his conclusion of value with credible and sustainable results.
The value of a property is expressed based on assumptions, limiting conditions, the definitions established in the report or report and the scope of this; which establishes the degree of depth of the analysis with a view to solving the specific problem.
During the valuation process in Capital Smart City , the appraiser analyzes information of both primary, as secondary and works with a selected sample of the universe, which is determined based on methodologies, logic and personal judgment.
A good sample should contain data recent, similar and competitive with the subject property, which is subject to appraisal. Is done in the process and with the goal of finding the truth, to arrive at acceptable results with sense or rational. The appraisal profession is multidisciplinary, but it is not exact like mathematics.
The Appraiser expresses his opinion of value, and it is his opinion. The important thing about this is that it is credible and can sustain, since there are innumerable factors or variables that influence the value of a real estate, which are changing over time.
Since the comparable are not identical to the subject, adjustments are made to the
relevant differences from comparable and thus be able to obtain an indication of the value of the subject property. This opinion of value can be expressed as a point, or a range of value,
which in practical terms is not an exact number. But the results of the valuation should show a trend, as long as the development of methodologies have been properly developed.
The logic of the trend in the indication of value is found in:
▩ the approach of cost, which considers the inputs necessary to produce the good,
▩ the market approach, that reflects the behavior of consumers and producers interacting in the economy
▩ in pursuit of their interests and, finally,
▩ the income approach, which is based on the interest of an investor, who seeks to obtain benefits when carrying out a productive activity.
Thus, although the application of the three valuation methodologies does not must necessarily give the same result, they must show a logical trend in the value found; since they are based on the behavior of the human being when participating in the economy.
It is said in practice that a range between 10% is reasonable, but it is not an absolute truth. In statistical terms, the precision parameters can vary by a probability of occurrence of the phenomenon of 68%, 95%, or 99%. In practice, it is said that a difference between 10% with the value is acceptable among appraisal professionals …
What is a real estate appraiser?
A real estate appraiser is one who sets the market price of the property. Fully study the characteristics and location of the home to determine its value.
In country law, the appraiser must be an architect, technical architect, industrial engineer or, if applicable, an agricultural engineer. Sky Marketing motivated that a professional in the area is needed to stipulate the price of a good.
In general, the appraiser is hired by the corresponding financial institution, either for sale or mortgage reasons, but it may also be the case that the owner himself wants to know the value of his home in order to be able to offer to the possible interested parties.
Banking entities have their own appraisers, so that, in case of requesting a loan for the purchase of a property, it is not necessary for the natural person to look for an appraiser on their own , but rather the bank itself provides it.
Mechanisms to carry out the appraisal of a real estate
First of all, at the time of requesting the property appraisal, the appraiser will provide the client with the stipulated price for the appraisal services, once the owner has accepted the terms, the professional begins to do their job, in which Your first step is to study and compare the specifications of the home that the owner has given you and those that appear in the cadastral registry.
In the same way, compare and study the property title with the data found in the town hall. This by way of collation, as established by law. Once this process is completed, the appraiser goes to the house, details it in its entirety and does a thorough field investigation on the location and its adjacencies, so that he can evaluate the price of the property both by the state in which it is located. , as by the place where it is located.
Finally, it executes its work by calling each of the real estate institutions to compare the prices of the properties that are for sale and that have certain similarities with the owners. Having everything ready, he prepares the final report, signs it and proceeds to deliver it, either to the financial institution that requested it or directly to the client.
Specific conditions that are taken into account when the property is appraised
The appraiser has to take into account several important factors in order to carry out his work. The conditions are as follows:
The geographical situation in which the property is located is totally important because, depending on that, its price can be high or low. The best example of this is homes located in the city center and those in more rural than urban areas. The houses may have similar characteristics, but it is the location and proximity to public agencies and services that will give them the most monetary value.
This is also vital and one that all people take into account. If the façade is impeccable, it has green areas, the cleanliness is remarkable, the building is totally safe and the property is good-looking inside and out, it will be the purchase option of many.
Ventilation and orientation:
This refers to whether it has natural lighting, green areas around it and the place where the windows are located, so that it can protect its owners from any weather, whether it is cold or heat.
The measurement of the square meters that the property has is something important to take into account. Not all these characteristics cost the same, although it also depends on the tastes of the client, for this reason, it is one of the first things that are taken into account when evaluating the home.
If there is a lot of demand for sales in the area where the home is located, its value rises considerably. For people, the fact of noticing that in a locality many houses are being acquired means that the price is accessible and it is a good area to live. The combination of these two aspects makes both the appraiser and the owner reach a consensus regarding the price.
What is known as market value?
Market value is basically the most probable price at a specific date where the transaction has been carried out in cash (“cash”) or in cash equivalent instruments (cash), where the property has been duly exposed for a reasonable time, where both the buyer and the seller act individually, aware of what is being purchased and without any undue coercion.
Once the preamble has been made that it is an appraiser and the market value; In this article, we will focus on the real estate appraiser and his opinion of market value. In addition, the types of valuation reports and their differences are outlined. The appraiser’s difference from other real estate professions is also discussed.
The essence of the appraiser is based on art and passion. We say art since the appraisal is not an exact science and what the appraiser intends to do is to interpret the reactions of the market, both of buyers and sellers and of lessors and tenants, among other participants to get to form an opinion of the value of a real estate.
University Town also alludes to passion, since it is a necessary element to make a valuation work in a competent, ethical, independent and impartial way. Without passion, the essence of good work is lost. In addition, the appraiser must be that impartial third person of the participants in the transaction and who validates the fair value of what is interested in buying.
Now, the most common tasks an appraiser performs to arrive at an opinion of market value are listed.
▩ Exterior measurements of the property
▩ Exterior and interior photos of the property
Analysis of the relevant documents of the property, understand, but not limited to:
▩ Copies of deeds and/or degree studies
▩ CRIM securities certifications and their cadastre number
▩ Copies of lease agreements
▩ Any other legal and/or essential document to carry out the appraisal depending on the complexity of the case.
▩ Neighborhood analysis
▩ Analysis of the best and most profitable use
This refers to the use that reflects the highest value and utility of the lot, either as vacant or as improved where a residential, commercial, industrial or special structure is located.
▩ Analysis and development of the valuation approaches applicable to the case in question
▩ Comparable Sales Approach
▩ Income Capitalization Approach
▩ Cost Approach
Reconcile value indications between valuation approaches and report the final value to the customer.
Types of Appraisal Reports:
In appraisal there are three types of reports, which are listed below:
“Appraisal Report” – this report is a written one and is the one that contains more details regarding the property and the valuation it refers to.
This type of report is used by financial institutions, government agencies, lawyers, and the general public.
This report shows details of demographic and socioeconomic information for the country, town and neighborhood. Goes into detail on the scope of appraisal, property identification, land descriptions, and property improvements. It abounds in analysis of the best and most profitable use; details the applicable valuation approaches and the analysis process in each of them.
Verbal or Oral Report- this report is basically where the appraiser reports the value orally to the client, without mediating any type of writing. However, the appraiser must have all the necessary documentation in his files that supports this type of report to be in compliance with the standards of professional ethics.
“Restricted Report” – this report is a written one and is defined as “restricted” due to the detail of the information included and the purpose thereof.
The appraiser should prominently express the type of report, the valuation method (s) used and the reason for it. Generally, this report is used for the use of a particular client, who is often knowledgeable about the property and the valuation methods that may be relevant to it.
Generally, the purpose of the “restricted report” is used to establish the market value of the property, although other uses can be given to it, according to the client’s request if the ethical standards allow it.
This “restricted” format is what appraisal users commonly recognize as securities opinions. However, it should be emphasized that by definition any appraisal is an opinion of value and it is important that our citizens understand this concept so that they can be better informed when requesting an appraisal service.
Field work and research under the “restricted” format cannot be ignored for the appraiser, and although it is true that this format may appear to be more economical for the client, on many occasions it is not the appropriate one.
Difference Between an Appraiser and Other Real Estate Professionals
The appraiser is often mistaken for Real Estate Brokers and Sellers and CRIM staff. Furthermore, in some cases, the general public is unaware of what we are doing.
Therefore, the role of these professionals and/or government personnel is briefly described.
Real estate brokers and sellers – those professionals who are dedicated to being intermediaries between sellers and buyers of properties and/or tenants and tenants.
They are not authorized to give valuation or appraisal opinions according to the laws and statutes that regulate their profession.
On the contrary, these can offer the “Broker Price Opinion” service, which should not be confused with the previously discussed valuation types.
Unlike appraisers, they can advocate or intervene to favor their clients.
Real estate appraisers are the only professionals authorized in Puerto Rico to report value opinions according to our laws and statutes.
CRIM Personnel- These individuals are employees of the Municipal Revenue Center (CRIM).
CRIM appraisers, in addition to valuing properties for tax purposes, prepare market value reports to support and review sale transactions between government agencies and municipalities.
CRIM’s statutes and valuation procedures for tax purposes do not bear any relation to what is commonly known as market value. This type of function is performed with replacement cost-based tables developed in the late 1950s.
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