Appraisal FAQs

The appraisal process is a structured and methodical approach to developing a credible estimate of value. It consists of six key steps: defining the problem, conducting a preliminary survey and creating an appraisal plan, collecting and analyzing relevant data, applying the three approaches to value, reconciling the value indications, and arriving at a final estimate of defined value. This systematic process enables the appraiser to reach a well-supported and defensible conclusion.

A central component of the appraisal process is the application of the three recognized approaches to value: the Market (Sales Comparison) Approach, the Cost Approach, and the Income Approach. After each approach is developed, the appraiser reconciles the results and selects the most appropriate value indication as the final estimate—based on the property type, available data, and market behavior.

For most residential appraisals—particularly those involving single-family or two-family homes—the Sales Comparison Approach is typically the most reliable. This method best reflects the behavior of buyers and sellers in the open market and provides the strongest, most defensible support for the concluded value.

Because a significant portion of private, corporate, and public wealth is tied to real estate, accurately determining its value is essential to the overall economic well-being of society. This critical responsibility falls to the professional appraiser, who assesses value by collecting, analyzing, and applying information specific to a given property.

The informed, objective opinion of a qualified appraiser—grounded in rigorous training and deep market knowledge—carries substantial weight. It guides the decisions of those who own, manage, buy, sell, invest in, or lend against real estate assets.

As an impartial third party in the lending process, the appraiser plays a vital role as a "check in the system." This neutrality helps protect buyers from overpaying for properties and safeguards lenders from extending credit beyond a property's true value—thereby promoting stability and integrity within the real estate market.

The physical inspection of the real property being appraised can take from approximately fifteen minutes to several hours, depending upon the size and complexity involved. After the initial inspection of the property the appraiser spends time touring through the neighborhood or area. The purpose of this tour is to search for comparable sales (other properties that are similar to the property being appraised) that have sold within the last six months to a year or so. When the field work is finished, the appraiser completes the report at his office. The report can consist of a short form report (typically under ten pages) to a long narrative report which can sometimes exceed a hundred pages. A short form report usually takes between three to six hours to complete. A narrative report can take weeks or sometimes even months, depending upon the complexity of the assignment.

The appraiser gets his or her information from a wide variety of sources, including the local Multiple Listing Service, local tax assessors records, local real estate professionals, county courthouse records, private public record data vendors, interviews with sellers and buyers, appraisal data co-operatives and his or her own personal knowledge or office files from previous appraisals. The quality and reliability of each piece of information is considered by the appraiser. 

The appraiser is not a whole house inspector, engineer, architect, electrician, plumber, H.V.A.C. technician or contractor. The appraiser briefly walks through the house to get an idea of the general condition and room count. An appraisal is not a guarantee of condition. The appraiser will ask about any visible problems and those which may not be visible, and will do his/her best to gauge any impact on value attributable to those problems. You are encouraged to seek the advice of experts if you have any questions about the structural or mechanical aspects

Just how much any particular individual improvement might add to your home's market value, what appraisers typically call the contributory value, can often vary widely from market to market, dictated by the wants and needs of each neighborhood. However, a local appraiser familiar with your market can help you figure out the best home-improvement value. ​

Under the Equal Credit Opportunity Act, your lender must provide you with a copy of the appraisal report upon your written request. If you are dissatisfied with any information contained in your appraisal report, you should contact your lender immediately. 

A survey of the house and property; A deed or title report showing the legal description; a recent tax bill; a list of personal property to be sold with the house if applicable; a copy of the original plans & specifications, The date and purchase price you paid when you purchased the property; a list of recent improvements & cost as well as any other information you feel may be pertinent. ​

Typically, an appraiser needs to document the condition of the property, both inside and out, from the layout and features to degree of modernization including any updates as well as the overall quality of construction. This information will help to assist the appraiser throughout the valuation and comparison process. The appraiser estimates the square footage (GLA - gross living area), by measuring the exterior of the home. Non-living areas, such as garages or covered porches, aren't included in GLA, but are accounted for and considered in value separately. Finished basements are also calculated separately from the above-ground GLA. The local market will dictate the contributory value of the finished basement, which can be influenced by governmental regulations, the degree of modernization, the quality of the finish, and other factors. The appraiser will generally consider only permanent fixtures and real property. Because many above-ground swimming pools and small sheds are not permanent structures, they typically usually aren't included in the valuation. Depending on the specific installation process and local custom, however, an above ground pool or small shed might be considered part of the real property.