Real estate appraisal is that the real one?
Real estate assessment or property valuation is the method of determining the value of the property on the basis of the greatest and the greatest use of real property (which fundamentally means determining the fair market value of the property). The person who performs this real estate appraisal exercise is named the real estate appraiser or property worth surveyor. The value as dependant on property assessment could be the fair market value. The real estate appraisal is performed using different techniques and the real estate appraisal values the house as different for difference reasons e.g. Different values might be assigned 2 by the real estate appraisal to exactly the same property (Improved value and empty value) and again the same/similar property might be assigned different values in a commercial zone and a residential zone. Nevertheless, the value assigned because of this of real estate appraisal might not be the value a real estate investor would consider when assessing the house for investment. In reality, a real estate investor might completely disregard the value that comes out of real estate assessment process.
The property would be evaluated by a good real estate investor on the basis of the improvements going on in the region. So as performed by a real estate investor real estate appraisal would come up with the value that the real estate investor will get out of the home by getting it at a price and selling it at a greater price (as in today’s). Equally, real estate investor could do his own real estate assessment for the estimated value of the home in, say 2 years time or in 5 years time. Again, a estate investor might perform his real estate assessment based on what value he/she can make by committing some amount of money in the property i.e. a estate investor might decide on purchasing a dirty/scary sort of property (which nobody likes) and get some small repairs, painting etc done in order to boost the value of the property (the value that the real estate investor could get by selling it in the industry). So, here the meaning of real estate appraisal changes completely (and can be quite different from the price that real estate appraiser could turn out with if the real estate appraiser conducted a estate appraisal exercise on the property).
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A real estate investor will usually base his investment decision with this real estate appraisal he does by himself (or gets done through someone). So, could we then term real estate appraisal as a truly real real estate appraisal?