As a Real Estate attorney, there are some things that are constants. One such constant is real estate appraisals – which analyze what fair market value is for a given property. If you’ve ever bought a home or commercial property, an appraisal report was likely part of the information that you were given at some point in the process. Many people skip over the document because of its length, however, I recommend that you take a deeper look at the details. Here are some tips for your next review:
- Appraisals should be completed by licensed professionals. In Virginia (and many other states) only licensed appraisers can value property located within the state. Many components of the profession are governed by the Virginia Administrative Code and the Uniform Standards of Appraisal Practice (USPAP). Check to make sure that your appraisal was performed by a licensed professional.
- Look at the comparable sales. Appraisers determine fair market value partly by looking at similar properties. The sales may be more or less applicable depending on their size, location, and use. For example, sales in Northern Virginia (i.e.: Fairfax County) usually have more valuable land than sales in Southern Virginia (i.e.: Louisa County). Look at the sales used in order to gain an understanding of whether they resemble your property/potential property. More similarity generally means more accuracy in the overall value determination.
- Read the analysis. It’s tempting when you receive your appraisal to skip to the end in order to get to the “big number” or final conclusion of value. However, it is important to remember that fair market value is the amount that a willing buyer is willing to pay, and a willing seller is willing to sell, on the date of valuation. Appraisers oftentimes apply different methodologies (i.e.: sales comparison, income, and cost approaches) to help come to their conclusion. If you skip the analysis, you miss the appraisers’ reasoning and any red flags they may have picked up. It’s worthwhile reading to spend an extra few minutes.
Counsel can provide legal analysis and note risks related to your property/potential acquisition based on review of an appraisal. Feel free to reach out to me to discuss.
If you have any questions about this or any other Real Estate topics, please contact me at email@example.com or 703-745-1849
ABOUT THEODORA STRINGHAM
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Theodora Stringham assists individuals, businesses, and organizations with growing successfully while minimizing liability. Focusing on real estate and personnel needs, Ms. Stringham executes sustainable plans for real estate development and employee matters. She provides comprehensive representation for everyday growth issues, including, but not limited to, re-zonings, site plan approvals, eminent domain/valuation concerns, employment discrimination, and disciplinary issues. Ms. Stringham’s scope of representation ranges from identifying potential liability and providing counseling/trainings, all the way through representation at trial.
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