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Understanding
an Appraisal Report
An appraisal is an estimate of the value of a specific
property. The appraisal report is a detailed description of
the process the appraiser used to reach the estimated value
he placed on the property.
Appraisals can be delivered as an oral report, a letter
report, a form or a narrative report. Narrative reports are
the most complete appraisal format. A typical narrative
report will contain the following sections and information:
� An introduction � which is used to
establish the appraisal's purpose and to state any
limitations that may exist
� A factual descriptions section �
which may include: photographic identification of the
property; area, city, neighborhood and location data; zoning
and taxes data; site data; description of improvements; and
history
� A data analysis section that includes the
appraiser's opinions � items in this section may
include: market analysis; highest and best use of the land,
as though vacant; highest and best use of the property, as
improved; land value; sales comparison approach; income
capitalization approach; cost approach; and reconciliation
of the value indications to a final value estimate
� An addendum � that contains a
detailed legal description; detailed statistical data;
leases or lease summaries; and the appraiser's
qualifications
Reading an Appraisal Report
Each part of an appraisal report should have a distinct
purpose and should add to your understanding of the basis
for the value determination.
Sections should build on one another and point to the
same conclusion. Information used to make adjustments and
reconciliation in the last portions of the report should be
drawn from earlier sections.
At EST Enterprises, we specialize in delivering
high-quality appraisals that are easy to understand. We will
also answer your questions, provide relevant
recommendations, and work with you to resolve any issues
that may arise in the quickest, most convenient manner
possible.
Source: Barron's Real Estate Handbook, Third Edition
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