Paper Example on Real Estate Appraisal Reports: Aligning With Logic & Standards

Summary of Article 1

Kratzer, M. (2004). Working with real estate appraisals tips on operating an appraisal. Copyright of real estate finance Aspen publishers Inc.

Real estate report should align with logical for easy understanding and enabling a client to make decisions. The three most known real estate appraisal mechanisms a self-contained, a summary, and a restricted appraisal report. In defining appraisal reports, uniform standards can be used to describe the market value. Defining the market value is relevant since it enables the appraiser to set up the conditions that are taken to be applicable in applying and transferring the property. It is also vital to include the customary definition of the market value as a measure to enable the sale of the property in competitive markets. There should be distinctions between market and fair value. Inappropriate adjustments should be scrutinized as a measure to ensure that ethical standards are followed in appraising a real estate property concerning the market and fair value.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Summary of Article 2

Anglyn, W. T., & Robinson, J. A. (1992). Scope of the Appraisal-A Practical Analysis. The Appraisal Journal, 60(1), 74.

Definition of terms is a challenge in real estate appraisal. Besides, practicality is not easy to attain; hence, there is a need to incorporate several issues in ensuring that the code of professional ethics is followed in appraising real estate. The constituents of an appraisal report should follow the standard rule. They should also align with actual and market value as well as the value of the property concerning time.

Themes

Thesis for Article 1.

It requires an individual to incorporate art and science in appraising real estate since there is a need to make adjustments and compute elements that can provide relevant information concerning the value cost and maintenance of a real estate.

Thesis for Article 2.

There are apparent confusions in understanding the scope of a process action as well as the provision of general guidelines on the contents of an appraisal report. It is not right to focus on providing a rote insertion for all the scope of appraisal section that there is a need to augment appraisers understanding of the knowledge of appraisal of real estate.

Authors Findings

Kratzer (2004) found out that market value is also distinguished from liquidation value as a measure to ensure that the appraisal report is acceptable. There are three approaches considered relevant in carrying out real estate appraising. They include the sales approach, income approach and cost approach. It is also vital to include supplemental standards as well as federally related transactions in ensuring that real estate value is ethical and acceptable. An appraiser is supposed to be engaged to encourage financial institutions to order an appraisal on an appraisal to provide a copy of the engagement letter as a measure to ensure that fair price and market price are considered in appraising the property.

On the other hand, Anglyn Robinson (1992) found out that there are common problems in appraising real estate. They entail the process of confirming, collecting, and reporting data. Besides, they include the process of appraising or citing approaches associated with the description of the six steps, the value of the property and attempting to explain appraisal scope. Anglyn and Robinson (1992) asserted that there are weaknesses mentioned concerning the examples provided on how real estate was appraised. First, there is an essential representation of iteration of the appraisal process as it is typically described somewhere within the appraisal report period in that manner there is no enough description of the data needed and which was used in collecting reporting and confirming processes. The data contained in appraisal reports can somewhat be considered to be trivial to oppress us, but it is vital for clients and users who mostly rely on the data contained in the reports.

Conclusions of Article 1

There are several significant challenges for real estate appraisers; the challenges are also evident among real estate bankers, investors and lawyers. Solving the problem requires an individual to have or to master content associated with uniform standards that are followed by appraisers as well as the practice is done to evaluate the value of a real estate. It is also relevant to master the content associated with the legal and regulatory framework, which are usually applied during the appraisal. The appraiser should also be familiar with pitfalls related to real estate appraising as a measure to enable them to avoid the challenge.

Conclusion of Article 2

The article concluded that the term scope of the appraiser for the appraisal has been changing since the first time it was used in the context of appraisal institute standards of professional practice. There is little explanation about appraising real estate and making the process of evaluating real estate to be challenging. Clients need to be given the data associated with a real estate as a measure to enable them to make decisions even though some sections of appraisal reports can be seen to be trivial tour prices. It is relevant to include within the scope some sections that can incorporate characteristics of geographical data and time constraints as well as the provision of a detailed description of the procedures which were omitted and the reasons why the emission was done. the process enables the operator to provide a thorough explanation of the process followed in collecting confirming as well as reporting the data field

Comparisons and Contrasts Using Examples

Kratzer (2004) incorporated multiple challenges associated with real estate appraisals like improper calculations and carelessness done by appraisers for the reasons of the imperfection of human nature. The aspect was also communicated by Anglyn and Robinson (1992). For instance, Anglyn and Robinson (1992) described appraisal challenges that an appraiser could experience in determining the aspects to be included in the appraisal report and the ones that are not supposed to be repeated. In that manner, they mentioned that for the sake of an individual who wants to buy a real estate it is relevant to include all the aspects to enable them to make a reasonable decision since most clients primarily depend on the data contained within the appraisal report.

The Economic Factors in Each Article Using Examples

Economic value involves several approaches like a collection of market data that were used during the time that the property was appraised as well as the time that the property is in the market for sale. The aspects collected can be used in determining the estimate of market value. Anglyn and Robinson (1992) mentioned challenges of estimating the highest amount of properties concerning the time taken for the property to be appraised. They focused on an example of how the property was assessed on July 20 1990. The photos of the property were taken on July 19 and July 20 1990. The apartment market in the subject area was also considered to be vital in determining the actual cost and in calculating economic value concerning the economic feasibility of the proposed project.

On the other hand, Kratzer (2004) emphasized on three approaches that can be used in evaluating a property concerning the economic values and challenges. He also mentioned federally related transactions and how they are associated with the economic value of a real estate property. He provided an example of FIRREA exemptions can be followed in ensuring that real estate value is done by following all the ethical considerations needed. For a transaction of 250 thousand dollars, there is a need to incorporate liens taken out of an abundance of caution rather than focusing on the value of the real estate. The aspect enables the client to ensure that access to other collateral or ability to sell a business is concerned with the economic values and ethical practices in carrying out business.

Report on Issues the Authors Discuss That Might Have an Effect on Value Conclusions

Federally regulated financial institutions can affect the conclusions to be made about the value of a real estate. Kratzer (2004) mentioned that some appraisal reports could experience challenges like lack of contribution of the value assigned to the subject improvement and sometimes the appraisal report can only include the market approach which is inappropriate in providing the value of the real estate. According to Anglyn and Robinson (1992), the omission of data for the sake of reducing the length of the reports can make property owners take advantage of unsuspecting clients.

Ethical Concerns that Might Affect the Conclusions of the Author

Some ethical concerns can affect the conclusions of the authors. The first one is the fact that most business people in the real estate business manipulate data to attract the attention of the clients and to make them feel that a property is of high value. In that manner, the aspect of encouraging a process to include all information about the property can make the client feel that the data is overwhelming and they might end up deciding without thorough scrutiny of the information included. In that manner, the conclusion of the appraisal report by the authors can be affected by such ethical concerns that are evident in the real estate market and business.

References

Anglyn, W. T., & Robinson, J. A. (1992). Scope of the Appraisal-A Practical Analysis. The Appraisal Journal, 60(1), 74.

Kratzer, M. (2004). Working with real estate appraisals tips on operating an appraisal. Copyright of real estate finance Aspen publishers Inc.