Realty appraisal– is that the real one?
Real estate appraisal or property evaluation is the procedure of figuring out the value of the building on the basis of the greatest and the best use of real property (which generally equates into identifying the fair market value of the building). The individual who performs this real estate appraisal workout is called the real estate appraiser or property appraisal property surveyor. The value as figured out by realty appraisal is the reasonable market price. The property appraisal is done using different methods and the real estate appraisal values the building as different for distinction purposes e.g. the realty appraisal may designate 2 different values to the very same property (Improved value and vacant value) and once again the same/similar property may be appointed different values in a domestic zone and a commercial zone. Nevertheless, the value assigned as a result of realty appraisal may not be the value that an investor would consider when assessing the property for financial investment. In truth, a real estate investor might totally ignore the value that comes out of realty appraisal procedure.
An excellent investor would assess the home on the basis of the developments going on in the region. So real estate appraisal as done by a real estate investor would develop the value that the real estate investor can get out of the home by purchasing it at a low cost and offering it at a much greater rate (as in the present). Similarly, investor might do his own realty appraisal for the anticipated value of the home in, say 2 years time or in 5 years time. Once again, an investor may perform his real estate appraisal based on exactly what value he/she can create by investing some amount of money of money in the home i.e. a real estate investor may decide on buying a dirty/scary kind of building (which nobody likes) and get some small repairs, painting etc performed in order to increase the value of the property (the value that the real estate investor would manage offering it in the market). So, here the definition of real estate appraisal modifications entirely (and can be extremely various from the value that property appraiser would come out with if the property appraiser performed a real estate appraisal workout on the home).
A real estate investor will usually base his financial investment decision on this realty appraisal that he does by himself (or gets done through someone). So, can we then call realty appraisal as a truly real ‘realty appraisal’?