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How to Describe Property

(by Dave Maloney 2012) With every appraisal assignment appraisers need to decide to what degree they must describe the subject property in the report. Must I describe the secondary woods of a 19th century highboy? Must I list the serial number of a flat screen TV? The computer’s color? The dimension of a round dining table? The exact quantity? Every piece of stainless steel flatware in the kitchen drawer? Can I group things such as everyday and common dishes, glassware, pots & pans, hand tools, etc. that are known to be depreciable in nature and of minimal value? Understanding the underlying requirements of USPAP will guide us in answering these types of questions.

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Market Value

(This is the 2nd of a 3-part article | Part 1 | Part 3)

(by David Maloney) Market value is an all-encompassing general concept that is based on a market perspective (as opposed to a user’s perspective) and on what marketplace participants view as typical and normal market conditions.

The public’s expectation that a market value appraisal reflects only the perspective of the marketplace, and is not affected by such other criteria as an intended user’s objectives, is important. Meeting this expectation serves to foster and promote public trust in professional appraisal practice, a fundamental purpose of the Uniform Standards of Professional Appraisal Practice and one that applies to all work performed under USPAP. (USPAP AO-22)

Why is market value such an important type of value? Because it refers to a price that a seller can expect to receive from a buyer in an open and fair transaction. Knowing the market value of a property allows a would-be seller to determine an asking price. Without knowing the market value, the seller might price their property too high or too low, either of which could have negative financial results (possibly on the seller as well as on the buyer).

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