Appraisals are something most people have done at least once in their lifetimes – be it for home, assets, business, or emergency. If this is your first time, however, you probably have a few questions.
Appraisals are a written value (usually monetary) or worth of an item. Items can range as small as jewelry and as large as homes and property. Most appraisers specialize in a specific field giving them a so-called unique eye. Others offer a one-stop-shop which can be helpful for phases like building or remodeling. In either case, appraisers are independent sources of information, as required by law, and are certified by state boards.
The reason properties, etc. need to be appraised is because the value of the item in question is not always the purchase value. Much like a car, the value can decrease over time drastically or otherwise increase due to better markets. The process of the appraisal varies; time, complexity, and scope of the appraisal all have a hand in determining this step.
There are several ways to appraise an item or business, but there are a few recognized methods. For businesses, these methods include Fair Market Value, Liquidation Value, and Going Concern Value. For homes, this can include a walk-around and even an inspection for wiring, foundation and other visible problems.
The most important thing for appraisal work is to make sure your appraiser has all the facts. Information such as updates, additions, similar markets, assets, comparables, and other data can be particularly influential during the entire process. If you’re hiring an appraiser, be sure to ask any and all questions you might have. They may not be able to tell you specific information until the appraisal is complete, but it helps to have communication to avoid the pitfalls of a bad evaluation.