Appraisers and real estate brokers come to market values differently. Appraisers are very analytical in their approach and rely heavily on past sales. They have a rigid method to derive value. An appraiser gives the value at that exact moment. A real estate broker’s value moves with the market and anticipates where the market is going. A real estate broker also uses past sales, but takes a much more practical view. For instance, some appraisers will not consider a bedroom in a basement (that is to code) a bedroom because it is sub-grade. A real estate broker is going to consider that a bedroom because it is a bedroom. An appraiser also gives very little value to the development potential of a property. A real estate broker looks closely at development potential and largely bases his opinion on what can be done with the property. Both methods of deriving values have their uses. An appraisal is good for situations like tax planning where you want to know the value of your asset at that one moment; a broker’s price opinion is good for pricing a property to go on the market for sale. So, if you are thinking of putting your property on the market, don’t get an appraisal to see where it should be priced, get a broker to let you know where it should be priced.
