Appraiser: Overview and Examples in Real Estate

What Is an Appraiser?

The term appraiser refers to a professional who determines the market value of an asset, notably in the real estate industry. An appraiser is expected to act independently of the buying and selling parties in a transaction. Their opinion about the real and fair value of an appraised asset must be unbiased by using observations as well as relevant statistics, facts, and other information. Depending on the circumstances, the appraiser presents their findings in a written or verbal appraisal.

How Appraisers Work

Appraisers attempt to attach a dollar value to items such as jewelry, art, gems, and family heirlooms. But their services are mainly used to determine real estate values. Investors generally hold an appraiser's work in high regard because of the lack of liquidity associated with assets such as these items.

All appraisers are expected to be alert and take notice of every aspect and characteristic that affects the value of an asset. In the case of real estate, for instance, this may include assessing things like the overall noise levels of the area, the proximity of the property to sources of recurring loud disturbances such as an airport or a railroad line, as well as the view offered by the property. Obstructions by neighboring buildings may also affect the value of a property and the general condition of the building and grounds will also be taken into consideration.

After collecting and documenting the information from their findings of the asset, appraisers may then use that information to compare the asset to other similar pieces of property that were sold recently. They may also take prior appraisals of the same property into account. Once compiled, an appraisal may be presented either in writing or verbally to the client.

People and businesses generally seek out the services of appraisers when they simply wish to get a value on a piece of property or when they want to sell an asset. Appraisals may be a requirement before an asset is sold—as is the case with real estate—and for regular evaluations by municipalities for property taxes.

Special Considerations

Most appraisers—especially those who work with real estate—must be licensed by their state in order to practice their profession. This means having a certain degree of education and experience, and taking and passing an exam by the state licensing board.

Appraisers spend their time determining the value of one asset at a time, especially when it comes to real estate. Building up their expertise in making their assessments often leads appraisers to specialize in a particular area of real estate. For example, a commercial real estate appraiser may focus on the market for office buildings, hotels, retail locations, and other properties that include an income generating quality. Meanwhile, a residential appraiser focuses on those properties where individuals and households are domiciled. This can include condominiums and single homes. A residential appraiser typically works with properties that have no more than four housing units. Larger scale properties, such as multiunit apartment buildings, would likely be classified as a commercial property for the purposes of an appraiser.