1. THE FORMAL APPRAISAL PROCESS
Real Estate Appraisal
Principles & Procedures
Betts & Ely

2. WHAT WE WILL LEARN: The Appraisal Process Types of Value
The Classical Approaches to Value

3. The Appraisal Process Identify the appraisal problem to be solved.
Identify appropriate solutions.
Execute the appropriate scope of work.
Report the findings and conclusions reached.

4. Identify the appraisal problem to be solved
Identification of the client and any other intended users.
The intended use of the appraiser’s opinions and conclusions.
The type and definition of value.
The effective date of the appraisal.
The subject property and its relevant characteristics.
Assignment conditions.

5. Identify appropriate solutions
The extent of identification of the property
The extent of property inspection
The extent of property of data researched
The type and extent of analysis employed to reach a conclusion

6. Execute the appropriate scope of work
Data → Cost Approach/Sales Comparison Approach/Income Approach → Conclusion
Reconciliation process:
Review the appropriateness of each approach.
Consider the adequacy and reliability of the data.
Consider the range of indicated values.

7. Report the findings and conclusions reached
Oral Report
Written Report

8. Types of written report
Self-Contained Appraisal Report
Summary Appraisal Report
Restricted Use Appraisal Report

9. Formats of appraisal reports
The Letter Report
The Form Report
The Narrative Report

10. Types of Value Generally value means worth of a thing. Assessed value
Book value/Capitalized value
Cash value
Depreciated value
Economic value
Exchange value
Face value
Fair value

11. Going concern value
Inheritance tax value
Insurance value
Leased value/Rental value
Liquidation value
Listing value
Loan value
Market value
Nuisance value
Potential value
Salvage value

12. Use value
Value in foreclosure
Value in place

13. The Classical Approaches to Value
The Sales Comparison Approach
The Cost Approach
The Income Approach