Real estate appraisal (or property valuation) is the process of determining the market value of a specific property at a given time. This could be an apartment, house, land, commercial space, and so on. The appraisal is performed by a certified appraiser (court expert or licensed evaluator) and is used for various purposes: sales, loans, legal disputes, insurance, taxation, inheritance, etc.
Real Estate Appraisal Includes Several Key Elements
Basic Property Information
- Location (city, neighborhood, micro-location)
- Type of property (apartment, house, land, commercial space)
- Area (net usable area, land area)
- Year of construction, renovation
Legal Documentation
- Title deed
- Construction and occupancy permits
- Land registry and cadastre review
- Urban planning conditions (for land)
Physical Condition
- Age and maintenance of the building
- Construction quality and materials
- Utilities (electricity, water, heating, etc.)
- Energy efficiency
Market Analysis
- Comparison with similar properties recently sold in the same or similar location
- Market trends (price increase or decrease)
- Supply and demand
Valuation Methods
- The most commonly used methods include:
- Comparative method – comparing with similar properties
- Cost method – calculating value based on construction cost and depreciation
- Income method – used for income-generating properties (rentals)
Value Conclusion
- The appraiser provides an opinion on market value (in a specific currency and on a specific date)
