How The Property Appraiser Gets His Job Done

To determine the value of any piece of property, the Property Appraiser must first know what similar properties are selling for, the cost today to replace any improvements on it, how much it takes to operate and keep them in repair, the income it may earn, and many other facts affecting its value, such as the current rate of interest charged for borrowing money to obtain a similar property, either through purchase or construction. Utilizing those facts, the property's value can be determined employing one or more of three different methods.

The first is to find properties like yours which have recently sold. However, their selling prices must be analyzed very carefully to get the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry to occupy it and would pay any price to get in. Another may have sold for less than it was actually worth because the owner needed cash right, away so was willing to sell to the first buyer making an offer. Using this approach - comparing selling prices of properties similar to yours - the Property Appraiser must always consider such over or under pricing to arrive at a fair valuation of your property.

The second is based on how much money it would take, at current material and labor costs, to replace your property with one just like it. If any improvement is not new, the amount of depreciation must also be determined.

The final method is used in addition to the other two if you happen to own property which does, or could, provide an income, such as an apartment complex, retail store space, or office building. In that case, the Property Appraiser must consider such facts as your revenue, operating expense, insurance, maintenance cost, degree of financial risk incurred by owning the property, and finally, the return most people would expect to receive on that kind of property