Because much private, corporate, and public wealth lies in real estate, the determination of its value is essential to the economic well-being of society. It is the job of the "Professional Appraiser" to determine these values by gathering, analyzing, and applying information pertinent to a property.
Unquestionably, the professional opinion of the appraiser, backed by extensive training and knowledge, influences the decisions of people who own, manage, sell, purchase, invest in, and lend money on the security of real estate. And because the appraiser is trained to be an impartial third party in the lending process, this professional serves as a vital "check in the system," protecting real estate buyers from overpaying for property as well as lenders from over lending to buyers.
Asian Homes® Realty Services is able to offer a complete appraisal service to our customers. Rodolfo D. Leonen, our Senior Partner, is a Licensed Real Estate Appraiser and Licensed Real Estate Consultant and such can provide a detailed property appraisal service for both buyer and seller. If you would like to view an example of a "Full Property Appraisal" please Please note this file is 2.13 MB in size and is a total of 15 pages in length.
The physical inspection of the real property being appraised can take from approximately fifteen minutes to several hours, depending upon the size and complexity involved.
After the initial inspection of the property the appraiser spends time touring through the neighbourhood or area. The purpose of this tour is to search for comparable sales (other properties that are similar to the property being appraised) that have sold within the last six months to a year or so. When the field work is finished, the appraiser completes the report at our office. The report can consist of a short form report (typically under ten pages) to a long narrative report which can sometimes exceed a hundred pages. A short form report usually takes between three to six hours to complete. A narrative report can take weeks or sometimes even months, depending upon the complexity of the assignment.
Our appraiser gets his information from a wide variety of sources, including the local Multiple Listing Service, local tax assessors records, local real estate professionals, county courthouse records, private public record data vendors, interviews with sellers and buyers, appraisal data co-operatives and his or her own personal knowledge or office files from previous appraisals. The quality and reliability of each piece of information is considered by the appraiser.
Typically, an appraiser needs to document the condition of the property, both inside and out, from the layout and features to degree of modernization including any updates as well as the overall quality of construction. This information will help to assist the appraiser throughout the valuation and comparison process.
The appraiser estimates the square meter (GLA - gross living area), by measuring the exterior of the home. Non-living areas, such as garages or covered porches, aren't included in GLA, but are accounted for and considered in value separately. Finished basements are also calculated separately from the above-ground GLA. The local market will dictate the contributory value of the finished basement, which can be influenced by governmental regulations, the degree of modernization, the quality of the finish, and other factors.
The appraiser will generally consider only permanent fixtures and real property. Because many above-ground swimming pools and small sheds are not permanent structures, they typically usually aren't included in the valuation. Depending on the specific installation process and local custom, however, an above ground pool or small shed might be considered part of the real property.
In our complex society, you may need and use the services of a professional real estate appraiser for a variety of reasons. Asian Homes® Realty Services can provide all of the following services: Appraisals - Residential or Commercial; Counselling and Consulting; Evaluations; Expert Witness Testimony; Litigation Preparation; Feasibility Studies; Market Analysis; Market Rent & Trend Studies; Tax Assessment Review and Advice or Zoning Testimony.
A certified appraisal is a formal, impartial estimate or opinion of value, usually written, of an adequately described property, as of a specific date, and supported by the presentation and analysis of relevant data. It is prepared as a result of a retainer, for reliance by identified parties, and for which the appraiser accepts responsibility. Only a certified appraiser can provide a "Certified Appraisal".
A comparative market analysis or brokers price opinion is an informal estimate of market value, based on comparable sales in the neighbourhood, performed by a real estate agent or broker. You can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder's or assessor's offices, through private companies or increasingly on the Internet.
The most important difference between a certified appraiser and broker or real estate sales agent is their motivation. A brokers typical goal is to obtain a listing and earn a commission. Although most brokers and agents are honest some might tell you what they think you want to hear. A certified appraiser is independent and has no axe to grind. They have no ulterior motives. Their only concern is to deliver a fair, accurate objective appraisal.
The appraisal process is an orderly and concise method of reaching an estimate of value. The process has six major steps which include: definition of the problem, preliminary survey and appraisal plan, data collection and analysis, application of the three approaches to value, reconciliations of value indications, final estimate of defined value. This process assists the appraiser in reaching a sound conclusion. The major phase of this process involves the application of the three approaches to value which include the Market Data Approach, the Cost Approach and Income Approach. The three approaches are reconciled and the value via most applicable approach, in the opinion of the appraiser, is selected as the final estimate of value. In most residential appraisals, particularly those of single or two family dwellings, the direct sales comparison or market approach best reflects the actions of buyers and sellers and is the most convincing and defendable approach to value.
The market or direct sales comparison approach to an estimate of value is a process of comparing market data, that is, prices paid for similar properties, prices asked by owners, and offers made by prospective purchasers or tenants willing to buy or lease. Typically a comparison grid is used and adjustments are made to each of the comparable sales used for major differences between the comparable and the subject property for such items as location, gross living or building area, lot size, condition/effective age, market conditions, degree of remodelling, construction quality and significant amenities, i.e.: fireplace, Jacuzzi, in ground pool, garage, deck, patio, porch and central air conditioning etc. In the market approach, the appraiser attempts to both gauge and reflect the anticipated reaction by a typical purchaser to the subject property.
A comparable sale is a property, that is similar to the subject property in most respects, is located in a similar (nearby) location, and has sold recently at arms length. The selection of comparable sales is in most residential appraisals, the single most important determining factor in establishing value. It is the appraisers responsibility to adequately research the local real estate market and determine which comparable sales best represent the value characteristics of the subject property.
An arms length transaction is one in which both seller and purchaser act completely independently of each other and have no connection or relationship to each other.
Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
The cost approach combines an estimate of land value with an estimate of depreciated reproduction or replacement cost of the improvements. The principle of substitution is the basis of the cost approach, in that no rational person will pay more for a property than the amount for which he can obtain, by purchase of a site and construction of a building, with undue delay, a property of equal desirability and utility.
The income approach is based on an estimate of net income from the operation of an income producing property and the selection of the property capitalization rate from market indications of similar properties. The principle of anticipation is the basis of the income approach and affirms that value is created by the expectation of benefits to be derived from possession, operation and/or capital gain at resale.
Typically, highest & best use means the use or utilization that provides the most profitable return on investment. It is that use, selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.
Summary Of Appraisal Services Provided:
Plant Machinery & Equipment
Furniture & Office Equipment
Land & Water Transportation Equipment
Valuation Of Intangible Assets
Shares of Stock
Dacion en Pago
Compliance with SEC
Litigation (i.e. Estate Partitioning)
Expropriation/ Just Compensation
Should you require Asian Homes® Realty Services to provide you with a quote for any of the above mentioned appraisal services or wish to discuss your requirements with us in more details, we would be very pleased to hear from you. You may contact us by telephone or by completing the short form below.
Elenita Frondoso Mallinson
Licensed Real Estate Broker REBL No. 18393 - N