Most people are aware that property appraisals are generally required during real estate transactions, but it’s important to understand that there are several types of appraisals used to determine the value of different types of properties in the Raleigh area. That’s why it’s so important to work with appraisal experts who have the background and expertise to deliver a meaningful document that will always stand up to scrutiny when a property valuation is required.
While there are several types and sub-types of appraisals our firm typically deals with, there are six that are commonly required by Raleigh residents and business owners. Our team of valuation professionals uses an array of data and strategies to identify which of the common types of appraisals will best meet a client’s needs.
When a person dies, they generally assume their property will pass to heirs or be sold with the proceeds divided among those heirs. However, that’s not as simple and straightforward as might appear at first glance. To avoid delays and disputes among heirs, an appraisal is generally required to determine the actual cash value of the estate.
Partition of Real Property
This type of appraisal is used when one party purchases another party’s interest in real property. Partnerships that are dissolving would be one common use of this type of appraisal process, but a partition appraisal can be beneficial when any type of joint ownership is present and one or more parties seeks to eliminate the arrangement.
Resale of Property
Before any type of real property is marketed, the seller will generally wish to establish a value for that property. Either wholesale or full market value can be estimated using a resale appraisal depending on the situation and the needs of the property owner.
Insurance companies are frequently reluctant to cover properties unless a current valuation is available. Insurance appraisals provide protection for both the property owner and the insurer as the property’s market value or replacement value is established and there are no questions related to that value should a loss occur.
Equitable Distribution of Property
During a divorce, it’s vitally important the couple’s property is fairly divided. That’s where an equitable distribution appraisal is used. This type of appraisal determines the marketable cash value of the property. That means the fair market value of the property is determined, but the cost of selling that property, including commissions and other fees, are deducted. Most appraisers will provide the report in whatever format the client needs to resolve any existing or anticipated issues.
The liquidation value of a company is the total worth of that company’s assets if it goes out of business and the assets must be sold. That value could include real estate, equipment, fixtures, and any remaining inventory. Intangible assets are not included in this type of valuation. Knowing the orderly liquidation value enables the disposal of assets in a timely and efficient manner.
Each of these appraisal types will have somewhat different uses, so it’s always important to discuss any unique circumstances with an appraiser prior to that appraisal being conducted. Appraisal experts have the ability to tailor a report, to some degree, to meet a client’s requirements.
How Value Is Determined
During the appraisal process, there are several factors that will impact the value assigned to property. The property’s location, overall condition, and design are all considered during the appraisal process. In addition, if there is a glut or shortage of similar properties currently available, that will factor into the valuation.
Standards of Practice
For your protection, appraisers comply with the Uniform Standards of Professional Appraisal Practice (USPAP). That means you can be sure your appraisal will be as accurate as possible and contain the information needed to make educated financial decisions. The appraiser is also qualified to act as an expert witness in court should that need arise.
Costs of Services
Costs are based on a flat rate or hourly rate depending on the type of appraisal and its complexity. We understand it’s important to have a basic idea of the cost prior to starting the appraisal procedure to establish a budget, and we’re always ready to provide an estimate to ensure there are no unpleasant surprises.
For additional information, contact the Carolina Auction and Realty team today.