income approach - Appraisers Blogs

From Data to Value: How Mass Appraisal Delivers Fair Market Assessments

Guest Author — Tue, 13 Jan 2026 13:30:54 +0000

Behind every annual notice of assessments is a complex valuation system most property owners never realize exists. The Appraisal Foundation defines mass appraisal as “the systematic appraisal of groups of properties as of a given date using standardized procedures and statistical testing.” In practice, mass appraisal is a method used to value large numbers of similar properties at the same time consistently. Properties may be grouped by physical characteristics, location, or property type. Mass appraisal is mostly used for ad valorem (property tax) assessments. Mass Appraisal in Henrico County To understand how mass appraisal functions in practice, it is helpful to look at how the process is applied at...

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Commercial Appraisal Reports: How Much Do They Cost?

Guest Author — Thu, 13 Oct 2022 12:30:25 +0000

Every business that owns a commercial property will require an appraisal. Commercial real estate transactions are the most common. Commercial real estate appraisals are necessary when acquiring or selling a commercial building. As with home appraisals, commercial property appraisals offer unbiased, third-party insight into their value. In contrast to residential properties such as single-family houses or condominiums, commercial appraisals estimate the value of stores, offices, hotels, apartment buildings, and the like. When you build, insure, tax, mortgage, or sell real estate, an appraisal is required. Besides helping secure a loan or ensure that you have enough insurance, it may also...

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Skipping Comp Photos, Suicidal Shortcuts

Michael Ford — Wed, 02 Oct 2019 12:30:17 +0000

I refuse to undermine my own profession by pretending that time saving shortcuts are always acceptable just because they are ‘more modern and progressive’. I know how long it takes to produce USPAP compliant, credible appraisal results. I charge accordingly for my time. I make no effort to compete on fees with half assed hybrids, evaluations, or single approach partially performed field work. Respectfully, neither should anyone else. Please stop undermining our own profession…. Recently The Appraiser Coach posted an article and links to a podcast suggesting its no longer necessary to photograph our comparable sales. I wrote a counter...

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USPAP Appraisal Reviews in 15 Minutes?

VaCAP Board — Wed, 04 Sep 2019 12:30:00 +0000

$15 USPAP Appraisal Reviews in 15 minutes? A VaCAP member shared with us something they read in an appraiser group on Facebook last week and expressed concern. We agree there is a reason to be concerned and want to alert our members to be cautious. We do not know if the source of this request is an amc or a lender, but either way, there is reason for concern. Here is what was shared: “I have been diligently looking for appraisers to complete to do our NEW USPAP reviews. These pay $15 per report and are completed in 10-15 minutes....

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Returning to Requiring the Cost Approach

Dave Towne — Thu, 30 May 2019 12:30:23 +0000

…the Cost Approach is the most INACCURATE of the three current ‘Approaches’ we use… Appraisers, for the past few weeks, emails have been sent by a third party asking appraisers to complete a survey about the appraisal process and the current forms. I did so; you should also. But I wanted to expand on one aspect of the survey. Two separate questions, on different survey pages, related to the Cost Approach (CA). These questions wanted appraisers to state their opinion about 1) if the forms provide adequate detail to develop a CA, and 2) if it is or is not...

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Who’s to Blame?

Michael Ford — Tue, 01 May 2018 12:30:38 +0000

Looking at who and what MISMO Directors are, is it a surprise that FNMA included language in basic appraisal forms resulting in appraisers having infinite liability and no ownership over their own work product IF they do work for FNMA?… European Union General Data Privacy Regulations (EU GDPR) may seem like a stretch for an Appraisers Blog topic, but please bear with me. For some time now, The Appraisal Foundation has been focusing on major international valuation issues other than real estate appraisals. IVSC is one of the bigger and most detrimental misdirection’s they’ve taken as far as impact on...

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TAF Has Lost Its Way

Michael Ford — Thu, 22 Mar 2018 12:30:21 +0000

How can TAF claim to be any kind of authority, let alone "THE foremost authority" for any of the other disciplines? I personally like and respect the individuals I’ve met from TAF. My strenuous disagreement with TAF are the policies and actions. Not the individuals. The opening or introductory remarks on The Appraisal Foundation’s web page state: The Appraisal Foundation (Foundation) is the nation’s foremost authority on the valuation profession [emphasis added]. The organization sets the Congressionally-authorized standards and qualifications for real estate appraisers and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals. This work advances...

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What IS a “ClearVal Appraisal”?

Michael Ford — Wed, 31 Jan 2018 13:30:00 +0000

Clear Capital ClearVal… Value Not So ClearCut… I’ve finally had an opportunity to read a hybrid ‘appraisal’ start to finish. All may read the unedited, non-redacted version in all its glory… or infamy, as the case may be. Please click here (report also embedded below) and read it first. I’ll wait right here. Finished? Great. One thing is clear. It is not an appraisal by any current accepted definition that I am familiar with. Ironically, there is also very little that is clear as far as support for the opined values is concerned. (I’m old fashioned and think it should...

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Is There a Fourth Approach to Real Estate Value?

Dustin Harris — Mon, 03 Apr 2017 12:30:08 +0000

I want to talk to you about the fourth approach to value… …and specifically an occasion on which it truly saved my bacon. Now, I know a lot of you real estate appraisers out there probably started chuckling as soon as you read the words ‘fourth approach to value.’ If you did, I get it, believe me! I used to be the same way. Over time, however, I’ve grown to see how it can often be a vital part of the valuation process. Let’s have a quick recap for anyone who’s either forgotten the fourth approach, or never learned it...

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The Site Value… A Walk in the Park or USPAP Nightmare?

VaCAP Board — Thu, 19 Jan 2017 13:30:32 +0000

Recognized methods to determine the site value… We have all been there, the subject is located in an established neighborhood, no vacant land sales in many years and the lender has requested the site value. USPAP Standard 1-1 states “be aware of, understand and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.” The other key standard to keep in mind is Standard 2-2a (viii) – “Summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analysis, opinions and conclusions: exclusion of the sales comparison approach, cost approach...

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FHA Appraisal Reporting Requirements & Data Delivery

Dave Towne — Mon, 06 Apr 2015 12:30:06 +0000

FHA – Addressing Appraiser and Property Requirements, and Appraisal Report and Data Delivery FHA Appraisers, You will want to review the newsletter below, especially the part showing the changes to reporting requirements. I suggest you copy and paste this new info into a word processor, then print it out as a reference tool. Secondly, if you use a template with pre-filled info to start FHA reports, I suggest you change it now to comply with their reporting requirements that take effect in June 2015. A Closer Look: Addressing Appraiser and Property Requirements, and Appraisal Report and Data Delivery As announced...

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Why All Appraisals are Always Wrong

AppraisersBlogs — Fri, 06 Mar 2015 13:30:24 +0000

Appraisal Bias & Appraiser Pressure: Why All Appraisals are Always Wrong Real estate markets cooled down in the fourth quarter of 2014, and despite historically low interest rates, refinance volumes dropped as well. The increasing pressure on lenders and real estate agents to maintain loan and sales volumes has brought about renewed interest in appraisal accuracy and increasing concern that residential real estate appraisals are inflated. A recent Wall Street Journal article asserts that “home appraisers are inflating the values of some properties they assess (appraise), often at the behest of loan officers and real estate agents, in what industry...

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Cost Approach Required for USDA Condo Appraisals

Dave Towne — Thu, 12 Feb 2015 13:30:50 +0000

Appraisers, New written instructions published by USDA ‘require’ a COST APPROACH for the condo being appraised. Interestingly, the pre-printed 1073 Form has NO PLACE on it to complete a Cost Approach – for good reason! While not impossible, it would be extraordinarily difficult to calculate a CA for a typical condo in a multi-unit building, without supporting documentation and a gigantic pile of cost info for the various components. And in fact, appraiser’s certification #4 on the 1073 form says that neither a Cost Approach nor an Income Approach are included unless the appraiser considers them necessary to arrive at a...

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Adjustments – Your Opinion Doesn’t Count

Richard Hagar, SRA — Tue, 14 Oct 2014 12:30:50 +0000

Regulations state that appraisal adjustments cannot be based upon an appraiser’s opinion. According to federal and state law, adjustments must be based on support and evidence- proof if you will, and an appraiser’s opinion is not considered to be “support.” Many appraisers have failed to support their adjustments and as a result have had their licenses revoked, penalties assessed and lawsuits lost, all because the they failed to understand a single but important requirement. Think about your appraisals. Are the adjustments based on your opinion or do you have proof of the adjustment in your workfile? Then one day I...

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The Cost Approach – An Approach to Value, Without Worth, Really?

Guest Author — Wed, 07 May 2014 12:30:45 +0000

Back to Basics (Part 2): The Cost Approach – An Approach to Value, Without Worth, Really? The foundations of appraisal were based upon three independent approaches to value. A system, when developed correctly, presents a check and balance within the report. The idea being that when an appraiser takes the time to develop each report, the data will show three independent motivations and three separate value conclusions. Nonetheless, the conclusions will support one another because the underlying principle for each approach is the principal of substitution. For the purposes of valuation or real estate appraisal, the principle of substitution is...

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You Need This In Your Reports

Guest Author — Mon, 05 May 2014 12:30:35 +0000

Please consider utilizing the following statements in your reports… In my years of appraising, I have had had to argue with many Lenders, Attorneys, and general pains in the butt. What many of us have found is that when Banks screw up, they come knocking at your door. What we need to do as appraisers is to state the separation of Lending liability to appraisal liability. Please consider utilizing the following statements in your reports after your statements of intended users that is required in your reports. I have been using this for years in my reports as it returns...

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Self Evident Reports

Guest Author — Mon, 16 Jul 2012 12:30:10 +0000

Over the span of the last several decades, many residential appraisers were brought into this profession to meet the demand for residential mortgage lending reports. The problem with this has become clear as many were trained with one mindset, residential lending appraisals. They became “self-proclaimed experts” at filing out forms and meeting client expectations. All in the name of doing a good job and making a living. I hold all residential appraisers responsible for this sad state of affairs. Had more of the professional appraisers taken on one or two trainees and mentored them into producing credible reports then perhaps...

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