Appraisal FAQ's

What is an appraisal?
An appraisal is an opinion of value or the act or process of estimating value. This opinion is derived by using one, two or three common approaches. These approaches are the comparison approach, cost approach and income approach. The Comparison Approach to value makes use of other “bench mark” properties of similar size, quality and location that have recently sold. A comparison is made to the subject property and monetary adjustments are made to reflect differences in the properties. The comparison approach is by far the most relied upon approach. The Cost Approach to value is what it would cost to replace or reproduce the improvements as of the date of the appraisal, less the physical depreciation, functional obsolescence and/or economic obsolescence plus the land value. The Income Approach to value is of primary importance in ascertaining the value of income producing properties. This approach provides an objective estimate of what a prudent investor would pay based upon the net income the property produces.

Why do I need an Appraisal?
There are several reasons one may want to get a Residential or Commercial Appraisal. The ten most common requests for an appraisal are as follows: 1) To Purchase a home, 2) to Refinance a home, 3) to remove PMI, 4) for an Estate, 5) Home Equity, 6) Divorce/Internal Division (Partner Buyout), 7) Tax Reduction, 8) Sale Price, 9) Valuation for Trust, 10) Valuation for Gift. The State licensed appraiser is trained to render an unbiased opinion based upon extensive education and experience requirements. The appraiser must adhere to strict Standards of professional Practice, which include a professional code of ethics. If you are the buyer of real estate, the appraisal protects you from overpaying for a property. If you are the seller, the appraisal can provide a valuable marketing tool for your sale. If you are a lender, the appraiser protects you from over lending to the buyers.

How do I prepare for the appraisal?
Upon receiving the appraisal request, the appraiser will contact you for a convenient time and date for the inspection. The appraiser will come to your home, measure the dwelling from the outside, photograph the exterior, and perform an interior inspection. An average dwelling inspection will take from 45-90 minutes.

To expedite the process, it is helpful to have the following available for the appraiser: your survey, recent tax bill, any floor plan rendition, deed restrictions and any mandatory homeowner information. In addition, a list of recent improvements and cost is important and helpful to the appraiser.

How much does an appraisal cost?
Because there are so many factors to consider for a fee quote, fees are not standardized. Factors relating to cost are dwelling size, locale, lot size, architectural complexity and appropriate appraisal form.