An appraisal of a property is the valuation of the rights of ownership. The appraiser must define the rights he intends to appraise. The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. An appraiser may spend only 10-15 minutes inspecting the subject property, however, this is only the beginning. Most of the research is completed behind the scenes. The end product usually produces a 25-30 page detailed report that acts as the set of eyes for the lender.
Considerable research and collection of general and specific data must be accomplished before the appraiser can arrive at a final opinion of market value.
Due to the many types of value, such as fair market value, insurance value, tax value and value in use, the need to precisely define the purpose of the appraisal is essential.