What Happens in a Home Appraisal?

Even before the appraiser comes to your home, he/she has begun the appraisal process by determining exactly what type of appraisal is needed. There are many different types of appraisals. The two you are most familiar with are, appraisals for sales and appraisals for refinancing. After clarifying the appraisal assignment, the appraiser has begun to collect information on your property from many different sources - tax rolls, title company, multiple listing service and private data services. Your basic property characteristics, such as age, gross living area, location, lot size, and special features, are then compared to the most recent similar sales in your area, preferably within a half-mile radius, and some possible comparable sales are identified for field review.

When the appraiser comes to your home, he/she will typically draw a floor plan sketch of your house, take pictures, and take notes on the various outside features such as type of exterior siding, foundation, roof, windows, landscaping, fencing, pool, patios, decks, sprinkler system, driveway, view, and lot size, utility, and slope. Inside, the appraiser will note the various types of flooring and wall treatments; any remodeling or updating of kitchen or baths; type of heating and cooling (if any); fireplaces; skylights; custom features such as built-in cabinetry, vaulted or cathedral ceilings, jacuzzi tub, garden windows; energy efficient features such as solar hot water, dual pane windows, ceiling & wall insulation; wet bar; solid interior doors; and the overall condition of the interior. It is important to tell the appraiser about any improvements you have made to the home in the past five years, since they may add value. When the inspection of your property is completed, the appraiser goes and looks at the comparable sales and takes their pictures.

Now that the appraiser has collected all of the data, the most intensive work begins. All the data gathered about the neighborhood, market conditions, and the property being appraised, is now analyzed by the appraiser and entered in a computerized report. At least three comparable sales, determined by the appraiser to be the most similar to your property, are now placed in the report. Adjustments are made to the comparable sales for items that are either inferior or superior to your property and a final estimate of market value is derived.

Even though two other approaches to value are usually considered, the Cost Approach and the Income Approach, the greatest weight is almost always placed on the Sales Comparison Analysis since it reflects the current activity in the marketplace.

The appraisal report is produced and usually consists of a form report and addendum, a copy of the appraiser's certification and statement of limiting conditions, a map with the location of your property and the location of the comparable sales used in the report, a copy of a plat map that has the dimensions of your lot, a floor plan sketch of your property, and picture pages of your property (front, rear, & street) and of the comparable sales (front only).