Why is it important to get a real estate Appraisal.
Because much private, corporate, and public wealth lies in real
estate, the determination of its value is essential to the economic
well-being of society. It is the job of the professional appraiser to
determine these values by gathering, analyzing, and applying
information pertinent to a property.
Unquestionably, the professional opinion of the appraiser, backed by
extensive training and knowledge, influences the decisions of people
who own, manage, sell, purchase, invest in, and lend money on the
security of real estate. And because the appraiser is trained to be an
impartial third party in the lending process, this professional serves
as a vital “check in the system,” protecting real estate buyers from
overpaying for property as well as lenders from over lending to
Appraisal VS. Engineer or Whole House Inspection?
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
What is the difference between a certified appraisal and a brokers
market analysis or price opinion?
A certified appraisal is a formal, impartial estimate or opinion of
value, usually written, of an adequately described property, as of a
specific date, and supported by the presentation and analysis of
relevant data. It is prepared as a result of a retainer, for reliance
by identified parties, and for which the appraiser accepts
responsibility. Only a state certified appraiser can provide a
A comparative market analysis or brokers price opinion is an informal
estimate of market value, based on comparable sales in the
neighborhood, performed by a real estate agent or broker. You can do
your own cost comparison by looking up recent sales of comparable
properties in public records. These records are available at local
recorder’s or assessor’s offices, through private companies or
increasingly on the Internet through such sources as Domania or Yahoo
The most important difference between a certified appraiser and broker
or real estate sales agent is their motivation. A brokers typical goal
is to obtain a listing and earn a commission. Although most brokers
and agents are honest some might tell you what they think you want to
hear. A certified appraiser is independent and has no axe to grind.
They have no ulterior motives. Their only concern is to deliver a
fair, accurate objective appraisal.
What is an appraisal?
An appraisal is a written opinion of the market value of a property,
such as a home or factory, as of a specific date. Prepared by a
qualified appraiser, it represents an independent and impartial
analysis of all the relevant data. Because market value is not
apparent just by inspection, an appraisal is usually required when a
property is sold, taxed, insured, or financed.
Do I need an appraisal?
You do if you’re buying or selling, insuring or making a claim,
financing, grieving property taxes, probating a will, settling a
lawsuit or divorce, involved in bankruptcy, dissolution, or other
litigation — in other words, if you need an estimate you can rely on
then a certified appraisal is the right choice.
How does the appraiser determine market value?
Appraisers use three approaches to value in Appraisal Practice when
determining the Market Value of a property:
The Sales Comparison Approach
The Cost Approach
The Income Approach
What factors does the appraiser consider?
For residential properties, style, age, overall condition, square
footage, and quality of construction are important. Other factors that
influence market value, such as neighborhood, location, proximity to
schools, zoning, comparable sales, design, and floor plan are also
considered. Many of the same factors apply to commercial
(income-producing) properties, but more complex criteria including
income and expense data, condition of improvements, and replacement
costs are considered as well.
What’s included in a typical appraisal report?
Industry standard forms are used for most residential appraisals, but
narrative reports are prepared for complex residential and all
commercial properties. All the reports contain facts and analyses of
the subject property, the neighborhood, and the market. Most contain
exhibits, including photographs of the subject and comparable
properties, a detailed scale sketch of the subject, a map showing the
subject in relation to the comparables, and a flood plane map showing
the subject. All appraisal reports contain a Statement of Limiting
Conditions and Appraiser’s Certification.
Besides the inspection, where does the appraiser get data?
The appraiser takes information from a wide variety of sources,
including the Multiple Listing Service, tax assessor’s records, real
estate professionals, county courthouse records, private data vendors
such as COMPS INC,Geodata, PropertyShark, interviews with sellers and
buyers, pooled appraisal data banks, personal knowledge, and in-house
files from previous appraisals.
How long does a report take?
A residential report can often be completed within 48-72 hours after
inspection of the property; a commercial report necessarily takes
longer. Inspection of a residential property typically takes from
fifteen minutes to several hours, depending upon the size and
complexity of the property. Again, a commercial property takes longer
depending on the size of the physical plant. After the inspection, the
appraiser normally tours the area to compare similar properties that
have sold within the last year. Then it’s time for the written report.
A short form report takes two to six hours. A narrative report can
take days, weeks or longer, depending upon the complexity of the
How much does an appraisal cost?
The cost varies, primarily with the complexity of the assignment.
Appraisals for smaller residential properties use standardized forms
and are the least expensive. Appraisals for complex residential
properties, for larger multi-family residential properties, and for
non-residential properties (e.g., commercial and industrial) are done
in narrative format and the cost of this work is higher. As a rough
guideline, the cost varies from the low hundreds for a single-family
residential property into the thousands for some commercial
properties. Please write for a free quotation.
What is USPAP?
USPAP is the Uniform Standards of Professional Appraisal Practice, the
code of ethics written by the Appraisal Foundation, which Congress
authorized as the source of appraisal standards and appraiser
qualifications. By relying on USPAP, an appraiser can produce
appraisals — analyses, opinions, and advice — in a manner meaningful
to you and not misleading in the marketplace. The current USPAP is
What qualifications are appraisers required to have?
Most states require that all real estate appraisers be state licensed
or certified and have fulfilled education and experience requirements.
They must adhere to strict industry standards and a professional code
of ethics as promulgated by the Appraisal Foundation. All AAS
appraisers are state Certified residential and General and hold the
highest certifications in their categories.
The following Items, if available, will help your appraiser to provide
a more accurate appraisal in a shorter period of time.
Survey of the house and property;
Deed or title report showing the legal description;
Recent tax bill;
List of personal property to be sold with the house if applicable;
Copy of the original plans & specifications, The date and purchase
price you paid when you purchased the property;
List of recent improvements & cost as well as any other information
you feel may be pertinent.
Why is it important to get a real estate Appraisal.