What can I expect during the appraisal process?

A real estate appraiser will visit and inspect the property. He or she will observe the condition of the property including the improvements (such as the structures), their size, condition and utility, the location, land and other improvements associated with it.

In an appraisal to identify the market value of your property, the appraiser will look at the property much like the typical buyer would look at it. Depending on what he or she observes, the appraiser may suggest the need for inspections or testing by other professionals, such as a home inspector, mechanical or electrical system expert, and the like. If you have had the property inspected by one of these or other professionals, it helps to provide the results of the inspection(s) to the appraiser. Likewise, if the property has recently changed, such as by remodeling or due to a catastrophic event (flood, storm, earthquake, etc.) photos of the property condition before the event are helpful.

The appraiser will then research land and improved property sales and other market activity (for example, listings, failed efforts to sell, new construction or land development, etc.) of nearby properties to develop his or her opinion of the value.

Professional appraisers will verify and confirm the market data they use, and then analyze the qualified information using several methods to identify how the market reacted to important aspects of the properties the appraiser determined were “comparables” in the market for your property.

An experienced professional appraiser knows that published data is, at best, a starting point in the analysis and is not as reliable and useful as the information that qualifies for analysis after verification and confirmation.

As a consumer, you should be aware that some “automated” valuation systems use published (raw) data as though it were qualified. While the calculated number may be mathematically accurate and quickly produced, the basis for the calculation can be artificial. As in some televised personal property valuations that appear to be fast and free, some automated appraisals are worth about what the customer paid – nothing!

After the appraiser completes the property inspection and market research and analyzes the qualified information, he or she will prepare a report explaining how the value opinion was developed and how the market analysis supports the property’s value. The appraiser should also provide a description and illustrations of the property such as maps, sketches and photos.

Upon receiving the report, review it and make sure to ask the appraiser about anything you do not understand.