"The upside to a housing slump is cheaper homes..."
quoted from Associated Press
Never give up on the American Dream of owning your own home.
| Appraisal History The doomsday survey of 1066 A.D. of all the properties and possessions in England, Scotland and Wales seems to be the first truly comprehensive effort to create a basis for evaluating property for the purpose of levying taxes. In 1523 in England, a text entitled "Book of Husbandry and Book of Surveying" was published by a Mr. Fitzherbert. Surveying during this period was a term used to describe both the measurement of land itself and the measurement of its value, most commonly rental value since most property either belonged to the crown or to the church at the time. One early pioneer in the U. S. was a Mr. Smellie, a Scotsman, who with a name like that, naturally gravitated into the law, becoming an attorney and later a politician, and capitalizing on his expertise as a railway valuer and arbitrator. He was the originator of a standardized market data comparison process in 1860. A written appraisal dated 1915 consisted of a 6"x 8" index card, hand-written with an address, date of "viewing", the simplest of descriptions, special features (one line) and an estimated value "for sale". George Hoyt, a very early member of the American Society of Appraisers, started his career in 1909 as a "pricer" of real estate, traveling by horse and buggy through the hills and flatlands of Oakland and Berkeley (California). An appraisal dated 1922 is one-page long, identifying the property as a two-story, 30-year old retail building, in good condition, and in a good location, occupied by two tenured retail businesses and two office tenants on the second floor, generating $3,000 per year in rent. The letter concludes that "a desirable price for your property is $25,000." In England, such short reports are still the norm. Form reports are a Post WWII phenomena created primarily by the federal government's FHA and VA. In 1958, these forms were one page in length, very simple, little discussion, and mostly boxes to check off. Savings and loans also developed their own forms during this period, usually even simpler and shorter in form and content. There was no real standardization until well into the 1970s. The computer age has changed all this with standardization increasing nationwide. Appraisers' roots are in the 16th century, modeled on 18th century valuers and surveyors in the British Empire. |
Real Estate Appraisal Today
The professional real estate appraiser estimates the value of real property (land and/or buildings)for any number of reasons --- including to help
set seller's asking price and to determine fairness of asking price: valuing estates, trades/exchanges, business mergers, acquisitions,
liquidations, bankruptcies; determining mortgage loans and insurance values; setting rental rates; determining value of construction and
remodeling costs; assessing property for taxes; valuing property for marital dissolution, arbitration, condemnation; and ascertaining whether
the present use of a property is its most profitable use.
An appraiser's estimate of a property's value usually is in writing and is most often on a document called an appraisal report. The appraiser
must know market conditions and needs some of the expertise of the surveyor, the builder, the broker, the accountant, the economist and the
mortgage lender.
To avoid conflict of interest, an appraiser's fee is never based on the value of the property but is determined by the time needed and the
overhead and expenses involved to complete the report.
The professional real estate appraiser estimates the value of real property (land and/or buildings)for any number of reasons --- including to help
set seller's asking price and to determine fairness of asking price: valuing estates, trades/exchanges, business mergers, acquisitions,
liquidations, bankruptcies; determining mortgage loans and insurance values; setting rental rates; determining value of construction and
remodeling costs; assessing property for taxes; valuing property for marital dissolution, arbitration, condemnation; and ascertaining whether
the present use of a property is its most profitable use.
An appraiser's estimate of a property's value usually is in writing and is most often on a document called an appraisal report. The appraiser
must know market conditions and needs some of the expertise of the surveyor, the builder, the broker, the accountant, the economist and the
mortgage lender.
To avoid conflict of interest, an appraiser's fee is never based on the value of the property but is determined by the time needed and the
overhead and expenses involved to complete the report.
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| National News from Associated Press... There is an expected 1.3 million foreclosures from mid-2007 thru 2009 in subprime mortgages, loans provided to borrowers with weak credit histories. Those foreclosures will wipe out an estimated $71 billion in housing wealth directly and another $32 billion indirectly by lowering the values of neighboring homes costing states $917 million in lost property tax revenue thru 2009. California, New York, New Jersay and Florida appear to be the biggest losers. |
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