The term appraisal of property has been widely used to refer to the process of developing the opinion about the value of tangible property. The appraisal process was developed so as to allow the value of residential areas, commercial buildings and apartment to be easily determined when it comes to selling of the property. The appraisal process has been known to proceed the disposal process at any given time. The process of estate appraisals been mainly carried out to determine how buildings and other resources in an estate have deprecated since construction. The appraisal process is carried out by specialized commercial enterprises such as the Minneapolis commercial appraisal.
The main reason for carrying out appraisal is to determine the value of a given property. Value as a term can be divided into three major categories which include the market value, value-In-use and investment value. The market value simply refers to thee price at which assets would trade in a competitive market setting. The term market value has also been used to refer to the estimated amount which an asset or a liability should be exchange on the valuation at a given date. The valuation process has been recorded to be to very much depended on the prices by which individuals are willing t offer in exchange for the property.
The second value which is determined by the appraisal process or use value. The use value is also referred as the net book value. The use value ca be described as the benefit in term of money that an owner gains I the process of utilizing a given property. The use value is not predictable as it has at times been recorded to be above the market and at times to be below the market value.
Investment value is another value that is determined by the property appraisal process. Investment value is easily determined during the appraisal process as it refers to the value a certain investor has invested in a given property. The investment value is tends to be higher than he market. There are other minor values which are determined by appraisal process which include the insurable and liquidation values. The two minor values are not much taken into account in the commercial appraisal process of residents, apartments and commercial enterprises.
The process of determining the value of properties is carried out through various methods some of which include sales comparison approach, the cost approach and lastly the income approach. The determination of a asset value through the sales comparison approach involves determining the value of a given property by comparing it to similar properties which have been sold in the near future. The cost approach method involves taking into consideration that the buyer will not pay more for any given property that what it would actually cost..