The term property appraisal has been used to refer the process of determining what a certain property is worth through the various appraisal methods. 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. This process has been carried out mainly one wants to dispose of old property. 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 appraisal process is normally carried out to determine the value of a property. Value as a term can be divided into three major categories which include the market value, value-In-use and investment value. Market value simply refer to the price at which certain property would be traded for at a competitive market setting. The term market price has also been used to refer to the estimated amount which an asset or liability should be exchanged on the valuation at a given time. The valuation at a given date is dependent on what price the buyer is willing to buy and at what price is the seller ready to sell the property.
Another type of value determined by the appraisal is the use value. The use value has also been described by another term which I 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 can either be below or above the market value.
The last value which is determined by the property appraisal process is the investment value. 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 always above the market value. There are other values which are determined during the appraisal process and which are the insurable and the liquidation value. Insurance and liquidity values are not very much significant as the market, value in use and investment values.
The process of determining the various value of property can be carried out through various methods which include sales comparison approach, the cost approach and the income approach. Determination of the value of an estate or an apartment by use of the sales comparison approach involves comparing the value of a property with similar properties which have been recently sold. 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..