Home appraisal, property valuation or land valuation is the process of developing an opinion of value for a property (usually market value). Property transactions often require appraisals such as a RICS valuation because they occur infrequently and every property is unique (especially their condition, a key factor in valuation), unlike corporate stocks.
Location also plays a key role in valuation. However, since property cannot change location, it is often the upgrades or improvements to the home that can change its value . Valuation reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on. Sometimes a valuation report is used to establish a sale price for a property.
Most, but not all, countries require valuers to be Licensed or Certified. Appraisers are often known as “property valuers” or “land valuers”; in British English they are “valuation surveyors”. If the appraiser’s opinion is based on market value, then it must also be based on the highest and best use of the property. In the United Kingdom, mortgage valuations of improved residential properties are generally reported on a standardized form.
Valuers of more commercial properties (e.g., income-producing, raw land) are often reported in narrative format and competed by a Certified RICS surveyor.