This is the most crucial step of the process. First, we determine the purpose of your appraisal. Most often it is to estimate the market value of the property (other types of value including use value, value-in-use, investment value, going concern, insurable value, assessed value, and fair value). Next, we must understand the function of your appraisal. Are you looking to buy or sell property? Are you looking to re-mortgage? Do you need to file an insurance claim for damage? Are you looking to appeal your property taxes? By understanding the purpose and function of the appraisal, we can ensure that the results are not only interpreted correctly but will also give a full and complete picture to whomever is receiving the valuation report when complete, be it a buyer, seller, lender, insurance company or even a government entity. Another important factor is what the property is currently being used for. Is it an office building? Or is it a cement factory? A portfolio of multiple properties? This allows us to figure out the two most important pieces of any appraisal – determining the types of data we will need to collect and what is the best approach to value we will be using. This conversation and information allow our team to fully define the scope of the project so everyone fully understands the terms and expectations.
Our expert appraiser conducts a comprehensive inspection which may include multiple visits of your property, looking at the entire external and internal footprint of the structure, furnishings, equipment, etc. During the inspection process, we are looking at multiple factors. We will gather general information, such as the age, size and use of the property and equipment, any recent improvements to the site or alternately improvements needed. We document the overall structure and construction, the layout versus the functionality, as well as the condition of the operating systems like electrical, heating and plumbing. All these pieces of a property can, and do, affect its value.
Along with the information you provide us for your property and what we gather via the site visit, we conduct a deep discovery process to compile additional data. General real estate trends, including the local economy and population growth or decline, are important information. Site-specific data and comparable properties, if applicable, are also needed benchmarks. This information along with your stated purpose allows us to determine the best approach to value, using one or more of these three valuation options:
• Cost – (the principle of substitution) ensures that no buyer or renter will pay more for a property than it would cost to build, buy or rent a similar property.
• Sales Comparison – compares the property being appraised with similar properties that have been sold.
• Income Capitalization – looks at the value of an investment property against the value of the future income that the property could produce.
Our team will calculate value using all three methods, then reconcile the various estimates to determine the best value to use in the final report based on all the data collected.
While many in our field write narrative appraisal reports by filling in the blanks in a computer program, we always custom-write each page of our client reports. And always with the legal mindset imparted on every team member by our founder, Charles Argianas, who holds a law degree. Your report will do more than give you a single number for your valuation. It will allow you and any other party interested in the property to fully understand the impact of every aspect, from its history, to the regional analysis of the area, to the zoning of the land, to the demographic profile of the area, to countless other factors. We adhere to the strictest government and industry guidelines; all our reports are prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). If the valuation is related to a federally related transaction we adhere to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), and the Appraisal Institute. Once we complete our report, we will set up a meeting to review it with you and welcome any questions or concerns you may have.