Determining the real estate market...
Appraisals establish the market value of all types of real estate, including a home, condominium, commercial property, vacant land, etc. They can be required for a variety of scenarios, such as, buying, selling, loans, insuring and tax assessment. Determining the value of these assets are usually used to assist in making a certain decision based on the respective scenarios. For example, lenders would typically need an appraisal of the buyer's property to be certain the asset could be sold for at least that amount and can give the lender an idea of the loan amount. The market value equates to the most likely price the asset would bring in the current open market and there are typically three valuation methods appraisers should be familiar with: the sales comparison approach, cost approach and income capitalization method. The real estate appraiser's job is to select the most accurate method to do the valuation depending on the specific available data associated to the asset.
The Future of Real Estate Appraisal
Various studies has shown a declining number of appraisers in the market today. Reasons relating to this is mixture of increases in barriers to entry since pre-recession periods, new business models and using alternative valuation products. The classical appraisal model was the focus on data collection and verification of their analytics and appraisers who were good at it thrived. However in today's world, with the expansion of Big Data, information is easily accessible so there is an increasing standard of the quality of the appraiser's valuation and their analysis of the data to bring an advantage to their services as opposed to others. Full automation in real estate asset valuation is unlikely to occur, they will however continue to evolve that will undoubtedly compete with the classical appraisal models. Adaptation will be required in the modern day appraisal and valuation world and into the future as they will be required to invent efficient techniques or highly accurate analysis to stay on top of the game.