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 is mainly carried out to residential buildings, commercial enterprises and apartments constructed for hire. The appraisal process has been known to proceed the disposal process at any given time. The appraisal process is mainly carried out to carry how much a given property has depreciated over a given time. The appraisal process is practiced by already set organizations.
The appraisal process is normally carried out to determine the value of a property. Valuation is carried out in order to determine three types of value of a property 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 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.
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 in details has been described as the cash flow that an asset generates for a specific owner when it put to a particular use. This value is never constant and has at point proved to be higher that the market value while at other points this value becomes low that 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.
Unlike the value at use, the investment value I constant as it is always above the market value. There are two other types of values determined during the appraisal process i.e. the insurance value and the liquidation value. The two minor values are not taken into much consideration during the appraisal process as the involve less amount of money.
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. The sales comparison approach is carried out by comparing a properties characteristics with those of similar properties that have been sold in the near past. The cost approach method involves setting prices below the current market prices as a buyer cannot pay more than the market prices..