Business Overview

A real estate appraisal company's specialty is appraising land and buildings. Real estate appraisals are used when people buy a home or business, apply for a new mortgage or to refinance an existing one, need information for insurance reasons, and settle estates after divorce or death.

Appraisers prepare a written description of the property, draw up diagrams, and then estimate the value. They also verify legal descriptions of property with city or county records. Fair value is determined by property condition, values of homes in close proximity to the home being valued (called a "comp"), building replacement costs, and valuations based on professional valuation manuals and cost estimators.

Who is this business right for?

This business is ideal for individuals who are detail-oriented, good with numbers, like having a flexible work schedule and are highly motivated.

What happens during a typical day at a real estate appraisal business?

Real estate appraisers gather and verify data on residential and commercial properties. They measure structures, physically inspect the exterior and interior of buildings, photograph property, and analyze market sales, the architectural quality, and the intended use of the property.

They also perform in-house appraisals and valuations for individuals, stay on top of the current real estate market conditions, assist in the construction of financial models for the real estate industry, gather data on recent sales, pending sales, and current listings. Real estate appraisers also maintain property records, indicating changes in local property values over time. They may also prepare and defend clients in formal appeal proceedings with help from senior appraisers or other companies.

What is the target market?

Clients are usually homeowners, but may also be other businesses.

How does a real estate appraisal business make money?

Appraisers make money by charging a fee for appraisals. This fee is usually a flat fee, but may also be a per-hour fee.

What is the growth potential for a real estate appraisal business?

Growth potential is usually small. An appraisal business is usually owner-operated, but may be grown into a larger company if there is enough demand. Some larger firms include the Tri County Appraisal Group; A Quality Appraisal, LLC; and Dugger, Canaday, Grafe, Inc.