The term appraisal of property has been widely used to refer to the process of developing the opinion about the value of tangible property. The term appraisal is used very much when to comes to residential, commercial and apartments. The appraisal process has been known to proceed the disposal process at any given time. The appraisal process is mainly carried out too determine how much a given property has depreciated since it was constructed. Valuation of property requires individuals with valuation skills who have professional training and experience I the appraisal field.
The appraisal process is normally carried out to determine the value of a property. Valuation is carried out in order to determine three types of value of a property which include the market value, value-in-use and investment value. The market value simply refers to thee price at which assets would trade in a competitive market setting. The term market value has also been used to refer to the estimated amount which an asset or a liability should be exchange on the valuation at a given date. The valuation at a given date Is dependent on what buyers are willing to offer for a given property.
Another type of value determined by the appraisal is the use value. The use value can also be referred to net book value. The use value has been used to described the cash flow that a given asset generates to a specific owner when it is utilized. This value is never constant and has at point proved to be higher that the market value while at other points this value becomes low that the market value.
The last value which is determined by the property appraisal process is the investment value. Investment value has been used to refer to the value of a given investor. The investment value is always above the market value. There are other values which are determined during the appraisal process and which are the insurable and the liquidation value. The two minor values are not much taken into account in the commercial appraisal process of residents, apartments and commercial enterprises.
The process of determining the value of properties is carried out through various methods some of which include sales comparison approach, the cost approach and lastly the income approach. The sales comparison approach is carried out by comparing a properties characteristics with those of similar properties that have been sold in the near past. The cost approach method takes into consideration what price a buyer is willing to offer and it should not be above the current market prices..