Definition of Appraisal
To appraise means the act or process of developing an opinion of value; an opinion of value. (USPAP, 2010-
2011 Edition, pg. U-1) It may be said that value is the present worth of all rights to future benefits, arising out
of property ownership, to typical users or investors. An appraisal report is usually a written statement of the
appraiser’s opinion of value of an adequately described property as of a specified date. It is a conclusion which
results from the process of research and analysis of factual and relevant data.
Real estate appraising methods are being standardized by virtue of the experience and practice of qualified
people in all parts of the country who encounter the same types of valuation problems, and who by various
methods and processes succeed in solving them in an equitable manner. It is natural, however, that differences
of opinion may exist as to the value of specific parcels of real estate and the means of estimating their value.
Property rights are measurable. Real estate as a tangible thing can be measured. It includes both land and
improvements and exists independent of any desire for its possession. To distinguish between its physical
aspects and rights in and to real property, the latter are called property interests in real estate.
These interests - ownership in fee simple and other lesser interests - have been discussed in preceding chapters.
Property rights in real estate are normally appraised at Market Value. There are many definitions of Market
Value, but a good working definition is the most probable price the property would bring if freely offered on the
open market with both a willing buyer and a willing seller.