Real Estate Valuation Criteria

 

Real Estate Valuation Criteria
Image: investopedia.com

For more than 15 years, Tyler Lowman has worked in the San Diego real estate sector. One of the areas in which Tyler Lowman has particular experience is valuation analysis, a process in which an appraiser determines the fair market value of a home or other piece of real estate.

Real estate appraisers use three different criteria in determining the value of a property: market data, income, cost. These three factors taken together will generally provide a real estate appraiser with a sense of the property’s worth, though different professionals may have different opinions on the value of a property.

Market data sets a range of values. During this state of valuation, an appraiser compares the property to other similar ones recently sold or currently on sale. Some factors, such as unique improvements or financing terms, can somewhat shift the value.

Cost, meanwhile, indicates the replacement value of any buildings or improvements on the property. How much would a buyer have to pay to purchase an empty lot in the same area and construct a comparable property?

Finally, income capitalization is primarily used for business properties and focuses on the long-term income the property can generate.

Education and Experience for Bureau of Real Estate Appraisers Licenses

 

California Bureau of Real Estate Appraisers
Image: orea.ca.gov

A graduate of the University of California, Riverside, Tyler Lowman earned a bachelor of science degree in business administration. An experienced real estate appraisal trainer, San Diego-based Tyler Lowman is currently an independent real estate appraiser licensed by the California Bureau of Real Estate Appraisers (BREA).

Established in 1990 by the California legislature, the Bureau of Real Estate Appraisers oversees and enforces the education and licensing of the real estate appraisal industry in the state. Funded through licensing fees, its primary functions cover both enforcement and licensing for real estate appraisers. In addition to approving continuing education courses and pre-licensing courses, the BREA sets minimum experience and education requirements for real estate appraiser licensing applicants.

The application process begins with set experience and education standards, the latter of which depends on the type of license being requested. Every license applicant must complete a 15-hour Uniform Standards of Professional Appraisal Practice (USPAP) course, which counts toward required education hours. Trainee-level applicants must also complete at least 150 hours of education, not including a required Supervisory/Trainee Appraisers course. Residential-level applicants must complete all trainee-level guidelines, as well as hold an associate’s degree or have completed 30 semester units of equivalent courses. Certified residential and certified general licenses require a bachelor’s degree or higher and 200 hours or 300 hours of education, respectively. Experience must be documented on both the Log of Appraisal Experience and the Experience Log Summary forms. Additionally, applicants must submit USPAP-conforming client reports that have not been redacted. After completing the application process, potential appraisers must complete a BREA examination and submit work samples for the bureau to review and approve.