What is an Appraisal

The Uniform Standards of Professional Appraisal Practice (USPAP) defines an appraisal as "The act or process of developing an opinion of value; an opinion of value." This opinion or estimate is arrived at through a formal process that typically uses the three ''common approaches to value''.

They are the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value.

There is the Sales Comparison Approach - which involves making a comparison to other similar, nearby properties which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a residential property.

The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.