What is a residential appraisal?

 An appraisal is the process of valuing real property, often used for mortgage lending, but also for tax assessment, estate settlement, marriage dissolution and any life event that requires review of real estate assets.

During the appraisal observation (not to be confused with a home inspection) we view each room of the house, the exterior of the home, accessible land and all outbuildings to gather the necessary data to support a credible opinion of value.

While county records currently provide a lot more information online, a part of the appraisal process is developing an independent analysis, often for a third party (i.e. bank). The county assessor has an interest in valuing a property to the best of their ability however an independent appraisal is intended to be relevant to the time frame being appraised and from an unbiased source (i.e. not the tax assessor, homeowner, real estate agent, potential buyer, family member, etc.)

An interior appointment is not always required, for mortgage transactions this decision is made by the lender.

 The average appointment time takes between 20 to 60 minutes depending upon the size of the home and other improvements on the property. Measurements are taken of exterior walls (and interior when necessary); photographs are taken of each room as well as of special or mechanical features, views and all exterior areas; the homeowner (when available) is interviewed regarding updates, features, utilities and neighborhood information.

 Compiling the data we obtain during the appointment and analyzing the local market trends is one of the first parts of the process. Significant time is given to multiple approaches to value with the primary resource for mortgage lending being the Sales Comparison Approach. Recent sales and listings are reviewed that are considered either comparable (similar) or competing (potential substitutes) are reviewed, observed, analyzed and weighted. This process is unique to each assignment as different amenities in different locations have a different impact on the market.

While it is important to keep in mind that the appraisal is a well-developed analysis, it is an educated opinion based on the standards enforced by the Uniform Standards of Professional Appraisal Practice. It is possible that two appraisals will not result in the same conclusion for a variety of reasons - including changing market conditions, available data and different perspectives from independent appraisers.

There are options in the loan process to request clarification to the report or reconsideration of value,. Discuss these options with your loan officer if the appraisal is for mortgage lending. This does not guarantee a change to the report or a change to value but should provide additional clarification to how the results were determined and why the value differs than what was initially expected.

If you did not directly order the assignment from us the short answer is NO. Questions will often arise from the homeowner upon receipt of the report, however the appraiser is bound by the Uniform Standards of Professional Appraisal Practice (USPAP) which includes Ethics regulations that do NOT allow the appraiser to disclose confidential information OR assignment results. 

While we are happy to clarify what may be misunderstood regarding the appraisal process in generic terms, we are not at liberty to disclose what specific analysis contributed to the conclusions of the appraisal on a property that was ordered by a lender.

The entity that orders the appraisal is our client. The appraisal is owned by the intended user this entity requests - regardless who paid a fee for the service or who owns the property.

The best way to clarify the appraisal conclusion is through the intended user - in mortgage assignments that is typically the lender.

Zillow offers many features and details that are helpful in the real estate industry; however Zillow is not a recommended resource for value (as indicated on their website). The algorithms relied upon do not currently have the resources for independent and sensitive analysis of each property it reports.

The price per square foot method is NOT a recognized source of value in the appraisal industry. An example of this method is a 3,000 square foot home sold for $300,000 therefore at $100 per square foot a 2,500 square foot home is worth $250,000. This does not sufficiently take into consideration other variances such as lot size, quality, view, condition, room count, upgrades, garage size, etc. Real estate is influenced by too many factors to limit the valuation process to only one component (GLA).