Real estate appraisal is that the real one?
Real estate appraisal or property valuation is the process of determining the value of the property on the basis of the highest and the best use of real property (which fundamentally translates into determining the fair market value of the property). The person who performs this real estate assessment exercise is named the real estate appraiser or property valuation surveyor. The value as based on real-estate appraisal could be the fair market value. The real estate appraisal is done using different practices and the real estate appraisal values the home as different for difference purposes e.g. The actual estate appraisal might assign 2 different values to the exact same property bare value) and (Improved value and again the same/similar property might be given different values in an industrial zone and a residential zone. However, the value assigned because of this of real estate assessment mightn’t be the value when assessing the property for investment a real estate investor would consider. In reality, a real estate investor may totally ignore the value that arrives of real estate appraisal process.
The property would be evaluated by a good real estate investor on the basis of the developments going on in the region. So real estate appraisal as completed by a real estate investor would produce the value that the real estate investor will get out of the home by buying it at a price and selling it at a higher price (as in today’s). Similarly, real estate investor can do their own real estate assessment for the expected value of the home in, say 2 years time or in 5 years time. Again, an estate investor might conduct his real estate appraisal based on what value he/she can make by committing some sum of money in the property i.e. an estate investor might decide on buying a dirty/scary kind of property (which no body likes) and get some minor repairs, painting etc done in order to boost the value of the property (the value that the real estate investor would get by selling it in the market). So, here the meaning of real estate appraisal adjustments completely (and can be quite different from the price that real estate appraiser could turn out with if a real estate appraisal exercise was conducted by the real estate appraiser on the house).
A real estate investor will generally base his financial commitment with this real estate appraisal that he does by himself (or gets performed through someone). Therefore, could we then term real estate appraisal as a truly real real estate appraisal?
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