Property Appraisals – Is It an Art or a Science?
There are real estate professionals who say that real estate appraising is an art and not a science. But other real estate practitioners say it is not an art but a science. What’s the real score? This article will try to settle this debate—it will take the middle ground.
It Is Both an Art and a Science
My answer to this question is: real estate appraisal is both an art and a science. Here is my reason for saying that. To appraise the value of a real estate property you will need exact numbers and figures. That is the practice of science.
But what is value? A certain real estate property may have different values to different people. Certainly, a seller will value his property more than what the buyer intends to pay for it. Look at the example of an abstract painting. An abstract painting is worthless to someone who loves real-life paintings. He can’t figure out what the painting means. But the abstract painting will be of much value to those who are able to put meanings into meaningless forms.
Here Is the Logic
So, can you see the logic of my position? When you appraise the value of a real estate property, you need the combination of science and art. Science is crunching the numbers, and art is appreciating the value of those numbers. You need both components to come up with the correct value of a real estate property.
Science is the study of relationships between different things. You need to do this to come up with a safe prediction. You can only appraise a real estate property, if you know the relationships between the things that influence its value. You need to use numbers in the process. And that qualifies it as a scientific activity.
But when you already have a final appraisal figure, you don’t just blurt it out to your client. You need to consider many things, such as the following:
- The current value of similar real estate properties in the same location
- The financial capability of the buyer
- How the buyer values the acquisition of the property
- And other things that may come up
And that’s where the artful activity comes in. Many marketing professional best describe this as “the art of making the deal.” you need to present the scientific figures in an artful way. This will convince the buyer that the real estate deal will be for his own good.
A client may regret his decision later if you only concentrate on the science and leave out the art. You can’t just give the client the scientific figures without qualifying them. Beautify the figures and make them palatable to the consciousness of the client.
That is the reason why I agree with the opinion that real estate appraisal is both a science and an art. It can’t be one and not the other. To be effective and truthful, real estate appraisal needs to be an art and a science.
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