Appraisal Facts



Appraisers

Appraisers are licensed by the individual states after completing coursework and internship hours that familiarize them with their local real estate markets.

The appraiser should be an objective third party, someone who has no financial or other connection to any person involved into the transaction.

The property being appraised is called the “subject property”.

Appraisers are not home inspectors.  Never count on an appraisal to determine if a home is in good condition.

Appraisal Report

Appraisals are very detailed reports, but here are a few things they include:

• Details about the subject property along with side-by-side comparisons on similar properties both sold and actively marketed
  
• An evaluation of the overall real estate market in the area
  
• Statements about issues the appraiser feels are harmful to the property’s value, such as poor access to the property
  
• Notations about seriously flawed characteristics, such as crumbling foundation
  
• An estimate of average sales time for the property
  
• What type of area the home is in (a development, acreage, etc.)

Appraisal Method

Sales Comparison Approach
The appraiser estimates a subject property’s value by comparing it to similar properties that have sold in the area. The properties used for comparison are called comparables, or comps. No two properties are alike so the appraiser must compare the comps to the subject property and makes pricing adjustments to the comps in order to make them more in line with the subject property. The result is a figure that shows what each comp would have sold for if it had the same components as the subject.