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 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 practiced by already set organizations 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. Market prices can also be referred as the estimated cost of both assets and liabilities which are acceptable in order to initiate the sale process of the property. 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.
The second value which is determined by the appraisal process or use value. The use value can also be referred to 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. 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 has been used to refer to the value of a given investor. The investment value is tends to be higher than he market. There are other values which are determined during the appraisal process and which are the insurable 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 valuation is carried out through a number of given ways some of which include the sales comparison approach, the cost approach, and thee 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..