KO Appraisal
Guides
Plain explanations of how appraisals actually work, written by the appraiser who does them. If one of these answers your question well enough that you do not need to hire anyone, that is a good outcome.
Estate, trust and tax
9 guidesDate of death appraisal
A date of death appraisal establishes what a property was worth on the day its owner died.
Probate Appraisal in California
A probate appraisal establishes the fair market value of real property as of the decedent's date of death.
Trust Appraisal in California
A trust appraisal values real property held in a trust, most often as of the date of the settlor's death.
Estate Tax Appraisal for Form 706
An estate tax appraisal supports the value reported on the federal estate tax return, Form 706, using the fair market value…
Gift Tax Appraisal for Form 709
A gift tax appraisal establishes the fair market value of real property as of the date it was transferred, for reporting on…
The Alternate Valuation Date Under IRC § 2032
The alternate valuation date is a federal estate tax election under IRC § 2032 that values the gross estate six months after…
Retrospective appraisal
A retrospective appraisal establishes value as of an effective date in the past.
Charitable Donation Appraisal for California Real Property
If you donate real property to charity and claim a deduction over $5,000, IRC § 170(f)(11)(C) requires a qualified appraisal…
Conservation Easement Appraisal
A conservation easement appraisal values the development rights a landowner permanently gives up by conveying a qualified…
Litigation and condemnation
4 guidesCondemnation appraisal
A condemnation appraisal is the independent valuation prepared for property a condemnor is taking, or has already taken.
Severance Damages: Valuing Injury to the Remainder in a California Partial Taking
When a public agency takes part of a larger parcel, California awards compensation for the part taken plus compensation for…
Expert Witness Appraiser: Real Property Valuation Testimony in California
An expert witness appraiser is a credentialed real estate appraiser retained to develop an independent opinion of real…
Bankruptcy Appraisal: Real Property Value Under § 506 and Plan Confirmation
There is no single "bankruptcy value." Section 506(a)(1) of the Bankruptcy Code directs that value be determined in light of…
Valuation mechanics
8 guidesCommercial real estate appraisal
A commercial appraisal answers one question: what is this property worth, to a defined standard of value, as of a defined…
How to value a commercial property
Valuing commercial property means selecting the approach the market itself uses for that asset, applying it to verified…
Commercial appraisal methods
Three approaches, and the judgment about which one governs. That judgment, not the arithmetic.
What is net operating income?
Net operating income is what a property earns after operating expenses but before financing, depreciation, and income tax.
What is a cap rate?
A capitalization rate is the ratio between a property’s annual net operating income and its value.
What is a good cap rate?
This is the most-asked follow-up in commercial real estate, and most published answers to it are invented.
What is a gross rent multiplier?
The gross rent multiplier is a property’s price divided by its gross rental income.
What is highest and best use?
Highest and best use is the reasonably probable use of a property that is legally permissible, physically possible…
Property types
6 guidesRetail Property Appraisal
Retail value is a function of how durable the rent roll is, and durability comes from the anchor, the trade area, and the…
Warehouse Appraisal
Warehouse value is unusually legible. Within a submarket, clear height, dock configuration, truck court depth, electrical…
Self Storage Facility Appraisal
Self storage is operating real estate. A single facility can carry several hundred leases that turn over constantly, priced…
Car Wash Appraisal
Most of a car wash's value sits in equipment and in an operating business, not in the building.
Restaurant Appraisal
A restaurant appraisal has to answer a question that reaches past the real estate: how much of the price is the building…
Vacant Land Appraisal
Vacant land is worth what someone can legally build on it, discounted for how long and how uncertain getting there is.
The appraisal process
11 guidesWhat is a real estate appraisal?
A real estate appraisal is an independent, supported opinion of value for a specific property, as of a specific date…
What does an appraiser do?
An appraiser develops and reports an opinion of value. In practice that means a short visit to the property followed by…
How much does an appraisal cost?
There is no national price for an appraisal, and any single figure quoted as one is describing a particular property type in…
What a commercial appraisal costs
Commercial appraisal fees are quoted per assignment, not from a rate card, because the work varies enormously with property…
How long does an appraisal take?
Two different clocks get confused in this question: how long the appraiser spends at the property, and how long until the…
How to read an appraisal report
An appraisal report is long, and most of the length is disclosure rather than analysis.
What happens if an appraisal comes in low?
A low appraisal means the appraised value is below the agreed purchase price.
What is an appraisal contingency?
An appraisal contingency is a clause making the purchase conditional on the property appraising at or above an agreed…
Assessed value vs market value
Assessed value is the figure your county uses to calculate property tax. Market value is what the property would sell for.
What is USPAP?
USPAP, the Uniform Standards of Professional Appraisal Practice, is the body of ethical and performance standards US…
What is an MAI appraiser?
MAI stands for Member, Appraisal Institute: a designation awarded to commercial real estate appraisers who complete the…
Next step
Tell me about the property.
Most assignments start with a short call, property type, the purpose of the appraisal, and the deadline you are working against. You get a fixed quote before any engagement, never contingent on the value reached.
Typical commercial fees range $2,000–$4,000. Residential and simpler assignments quote lower. Every engagement is quoted in advance, so the figure is known before work begins.