The following example was designed to walk our client(s) through the appraisal process and items considered in the appraisal process for understating simplification of Objective, Purpose, Scope, Methodology, Date of Value and Owner of Record for lending or estate valuation for taxable, mortgage or estate purposes in the state of California.

Objective of Appraisal
The objective of this appraisal is to estimate the defined value of the specified interest in the subject real estate as of the dates of value.

Purpose (Intended Use) Of Appraisal
It is the Appraiser's understanding that this appraisal is to be used to underwrite financing for which the subject property will serve as collateral. As stated in the transmittal letter, this appraisal may not be used or relied upon by anyone other than the addressee of the transmittal letter and by other parties directly related to the intended use described above for any purpose whatsoever without the express written consent of the Appraiser. Without the transmittal letter, the appraisal report is incomplete and cannot be relied upon.

 

Scope of the Assignment
All extraordinary assumptions and hypothetical conditions of the appraisal, whether they result from instructions of the client or conditions observed by the Appraiser, are described in the Extraordinary Assumptions and Hypothetical Conditions of Appraisal section of this report. Additional comments related to the scope of work in this appraisal are in the Appraisal Methodology section below.

The requirements of the Uniform Standards of Professional Appraisal Practice regarding scope of work and reporting options are described at Appraisals – Scope of Work and Types of Reports at Addendum D. This is a complete appraisal of the subject property as is. The subject real estate and surroundings were inspected by the Appraiser consistent with the requirements of an appraisal and not a comprehensive technical review as described below under General Assumptions and Limiting Conditions of Appraisal. The Appraiser inspected the interior of the subject building, the exterior of the building, and the surroundings.

All of the appropriate approaches to value have been used as described under Appraisal
Methodology below. The Cost Approach is not used because it is considered insufficiently reliable to contribute to the final value estimate. The market data used is based on research considered adequate to a final value estimate. Techniques used in acquiring and confirming data are discussed in the various sections of this appraisal report. Additional market data and/or analysis may be possible in the appraisal; however, the value conclusion would likely not be changed significantly as a result.

This appraisal is conveyed in a Summary (abbreviated narrative) Appraisal Report under the Uniform Standards of Professional Appraisal Practice because of the familiarity of the users of the report with the subject property and its environment, and in the interest of saving time and expense. Items excluded from this report include details of the subject neighborhood, market area, site, and area improvements.

Although no additional conclusions regarding the subject and its market have been requested in this assignment, the Appraiser has found it useful to reviewers of appraisals to know the Appraiser’s perceptions of the trends of prices and rents in the market of an appraised real property. These trends are discussed below under Real Estate Market Conditions and in the relevant additional sections of the report.

Date of Value
The appraised value of the subject property is estimated as of ________. The real estate was inspected on _________ and other dates, and market data was gathered and analyzed before and after that date. It is assumed that the physical condition of the subject on the date of value is similar to what it was on the date of inspection.
Current, past, and prospective future market conditions trends are recognized in the appraisal, as well as typical prospective purchaser attitudes toward those trends, in order to estimate the various components of the appraisal analysis as of the dates of value. Every effort is made to develop the necessary market data upon which to estimate market trends.

Owner of Record
According to public records, the current owner of the subject property is:___________
History of Subject Property

The subject improvements were constructed in _____. To the Appraiser’s knowledge, the property has been used as (office/residential dueling) continuously since then.
Recent Sales and Listings of the Subject Property are: ___________

The most recent known sale of the subject took place in ________ and is too dated to be of use in this appraisal.
Current Listing/Pending Contract for Sale of the Subject Property is: ____________

The subject property is under contract for sale at a price of $_________ equivalent to $____/SF.
The pending sale price of the subject is (lower/higher) than the appraised value as is, and is analyzed in the Sales Approach section of this report.

Appraisals can be contested by the client, however, sometimes a new appraisal can be lower than the first adding one more hurdle to overcome for both buyer and seller than can rend the transaction null and void if bank financing is involved.

Because every valuation is unique, and presents its own specific (math) problem, the Etchart Consulting Group will walk you through the process. The client must keep in mind that appraisals do not determine real estate value. They determines real property values. Real property value involves number crunching. The report that culminates from the research, data collection and analysis is simply a narrative that supports and describes the numbers. More likely an appraisal will be use to determined the amount(s) a financial institution or private lender will use as collateral value for a mortgage needed by the buyer to finalize a credit base purchase transaction regardless of the down-payment received by the lender from the buyer(s).

For further questions regarding the appraisal process in your particular commercial or residential transaction feel free to contact us directly in writing at This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..

 

 

Etchart Consulting Group/Guarantee Real Estate
1175 Shaw Ave. # 322 Clovis CA 93612
180 W. Bullard Ave. Clovis CA 93612
(559)681-8976