Exam 3: The Formal Appraisal Process

The typical appraisal assignment is to appraise the "fee simple" ownership.

Income and commercial properties are most often appraised by emphasizing the income approach to value.

Well-prepared Restricted Use Appraisal Reports are considered to be less reliable than Self-Contained Appraisal Reports.

The type of appraisal report used, (Self-Contained, Summary, or Restricted Use) should be decided upon in advance between the appraiser and the client.

The cost approach is normally given more weight in the appraisal of old and substantially obsolete buildings.

Value in use is an objective kind of value that means the value to people in general.

If you are a state licensed or certified appraiser, in most states your appraisals must always conform to USPAP.

In the sales comparison approach, the appraiser adjusts comparable sales by adding or subtracting amounts from their sale price to "improve" their comparability.

Written appraisals usually consist of a letter, a printed form, or a narrative report.

In simple terms, market value essentially means the most probable sales price in an open market.