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. This process has been carried out mainly one wants to dispose of old property. The process of estate appraisals been mainly carried out to determine how buildings and other resources in an estate have deprecated since construction. The appraisal process is carried out by specialized commercial enterprises such as the Minneapolis commercial appraisal.
The main reason for carrying out valuation is valuation i.e. determination of the value of a property at a given time. Value as a term can be divided into three major categories which include the market value, value-In-use and investment value. The market value is carried out in order to determine the price at which assets would trade in the competitive market environment. Market prices can also be referred as the estimated cost of both assets and liabilities which are acceptable in order to initiate the sale process of the property. The valuation at a given date Is dependent on what buyers are willing to offer for a given property.
The second value which is determined by the appraisal process or 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. The use value is not predictable as it has at times been recorded to be above the market and at times to be below the market value.
The last value which is determined by the property appraisal process is the investment value. The term investment value when used in business context has been known to refer to the value to one particular investor. Unlike the value at use, the investment value I constant as it is always above the market value. There are other minor values which are determined by appraisal process which include the insurable and liquidation values. 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 various value of property can be carried out through various methods which include sales comparison approach, the cost approach and 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 involves taking into consideration that the buyer will not pay more for any given property that what it would actually cost..