Inland Empire Appraisal Blog

Real estate appraisal, the process of determining the value of a piece of property, has a long and varied history that dates back to ancient civilizations. In this blog post, we will explore the evolution of real estate appraisal from its earliest origins to the present day.

Ancient Appraisal Methods

The ancient Egyptians and Babylonians are among the earliest civilizations known to have used some form of appraisal to value land and property. In ancient Egypt, scribes would inspect land and buildings and record their findings on papyrus scrolls, which were used to determine the value of the property. In Babylon, officials would use a system of weights and measures to value land and property.

The Greeks and Romans also had their own methods of real estate appraisal. The Greek philosopher Aristotle believed that the value of land was determined by its ability to produce an income, while the Roman Empire relied on appraisers to determine the value of land and buildings for tax purposes.

Modern Appraisal Techniques

During the Middle Ages, real estate appraisal began to take on a more formalized structure. In England, property values were determined by a system of valuation known as "rating." Appraisers would visit each property in a given area and assign it a rating based on factors such as its location, size, and condition. These ratings were used to determine the property's value for tax purposes.

The Industrial Revolution brought about significant changes in the field of real estate appraisal. The introduction of mass-produced building materials, such as bricks and concrete, led to the development of new valuation methods that took into account the cost of construction. Appraisers would use these methods to determine the replacement cost of a building, which became a standard method of real estate valuation.

In the United States, the field of real estate appraisal was further developed in the early 20th century. In 1913, the first professional association of real estate appraisers, the Society of Real Estate Appraisers (now known as the Appraisal Institute), was founded. The organization set standards for appraisals and promoted ethical conduct among its members.

In the 1930s, the United States government established the Federal Housing Administration (FHA), which introduced new appraisal standards to ensure that homes being purchased with FHA-insured mortgages were properly valued. The FHA's appraisal guidelines became the basis for many of the appraisal standards still in use today.

Modern real estate appraisals typically use a combination of methods, including the cost approach, sales comparison approach, and income approach. The cost approach involves estimating the cost of replacing a building with a similar one, while the sales comparison approach involves comparing the property to similar properties that have recently sold. The income approach is mostly used for commercial properties and involves analyzing the income generated by the property.

Conclusion

Real estate appraisal has a long and varied history, from the ancient civilizations of Egypt and Babylon to the modern methods used today. Throughout the centuries, the field has evolved to become a sophisticated and standardized practice that helps to ensure fair and accurate property valuations. As the real estate industry continues to grow and change, real estate appraisal will undoubtedly continue to evolve with it.