The process of determining value of a property on the basis of the highest and the best use of real property is known as The Real estate appraisal or property valuation.
The person who provides this service is known as Real estateAppraiser. Value which is determined by Real estate appraisal is the also called fair market value. The real estate Appraisal is done using various methods and the real estate appraisal values the property as different for different purposes, the real estate appraisal might assign different values to the same property (Improved value and vacant value) and again the same property might be assigned different values in a Residential zone and a commercial zone. However, it is not the necessary that the value assigned by real estate appraisal will be considered by real estate investor. In fact the investor might fully ignore the value that comes out of real estate appraisal process.
On the basis of development a good real estate investor evaluates the property.
So real estate appraisal done by a real estateinvestor can come up with the value that the investor can get out of the property by buying it at a cheap price and selling it at a much higher price (as the case in present). Similarly, real estate investor could do his own real estate appraisal for theexpected value of the property in, say two years time or in five years time. A real estate investor again might carry out his real estate appraisal based on what value he can create by investing money in the property.
A real estate investor might decide on buying a unmanaged kind of property which no one is ready to buy and get some repairs, painting etc done in order to increase the value of the property. Here the meaning of real estate appraisal is change completely.
A real estate investor will generally do real estate appraisal by himself to decision on his investment. Now the question is “can we then term real estate appraisal as a really real ˜real estate appraisal’?
Source: http://www.hicow.com/
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