The appraisal process has been used widely to determine what a property is valued at in a given time by appraisal experts. The appraisal process is mainly carried out to residential buildings, commercial enterprises and apartments constructed for hire. The property appraisal process is mainly carried out so as to determine how much a property is worth before disposing it off. The appraisal process is mainly carried out to carry how much a given property has depreciated over a given time. The appraisal process is carried out by specialized commercial enterprises such as the Minneapolis commercial appraisal.
The main reason for carrying out valuation is valuation i.e. determination of the value of a property at a given time. 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 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 value which is determined by the appraisal process is the 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 can either be below or above the market value.
The last value which is determined by the appraisal process is the investment value. The term investment value when used in business context has been known to refer to the value to one particular 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 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 takes into consideration what price a buyer is willing to offer and it should not be above the current market prices..