Appraisals

Appraisal

A professional estimate of a property’s market value

Where are appraisals used?

Real estate transactions, refinancing, taxation, and legal disputes

When are appraisals required?

When federally related loans over $400,000 are being used

Market value

Most probably price a property would bring in an open, competitive market

Arms-length transaction

A business deal between two independent parties who are not related and are acting in their own self-interest

What must a property have to have value (D)?

Demand - desire and ability to purchase

What must a property have to have value (U)?

Utility - useful for intended purpose

What must a property have to have value (S)?

Scarcity - limited supply

What must a property have to have value (T)?

Transferability - ownership can transfer legally

Who prepares a CMA?

A real estate licensee

Who prepares a appraisal?

A licensed appraiser

How are CMAs used?

CMAs are used informally

How are appraisals used?

Appraisals are used formally

In MN, who licenses appraisers?

The Department of Commerce

What are the levels of appraisers?

Trainee, licensed residential appraiser, certified residential appraiser, certified general appraiser

Can real estate licensees prepare appraisals?

No, unless they are also a licensed appraiser