Appraisal Basics

• The appraiser visits the subject property and performs a basic review of the home. The appraiser is not a home inspector and is not looking for the same items a home inspector is. The appraiser walks through the home, sketches the floor plan and measures the lot size. The appraiser then researches the neighborhood, looking for other homes similar to the subject that have sold recently.
  
  

Comparable Sales

• Comparable sales are the homes the appraiser finds in the subject's neighborhood that she then compares to the subject. The appraiser is looking for homes with the same functionality, design and curb appeal as the subject property. The appraiser finds homes he thinks would be in the home's same general market. She should not compare a duplex or condominium to a ranch style single-family home. The appraiser must find at least three comparable sales for each appraisal.
  
  

Distances and Adjustments

• Ideally, the comparable sales will be located within one mile of the subject property. Sometimes this is not possible, particularly with rural properties. Rural properties tend to have larger lot sizes and have a lot fewer homes with which to compare. The more recent the homes sold, the better, as aged sales do not always reflect the most accurate picture of the current marketplace. Since it is unlikely the subject and the comparables will look identical, the appraiser makes adjustments. A home with four bedrooms may be worth more than the subject that only has three bedrooms. So the appraiser adjusts the four bedroom home's value to reflect what it might be worth if it were only three bedrooms. These adjustments are common and a really strong appraisal doesn't have adjustments exceeding 10 percent of the appraised value. Sometimes adjustments have to exceed 40 or 50 percent because the available comparables are not very similar to the home.
  
  

Photos

• The appraiser provides photos of the subject home's interior and exterior. The interior photos must show all of the living areas, including bedrooms and bathrooms. If the appraiser notices any obvious damage or safety issues, the appraiser must provide a photo of those as well. The appraiser also provides photos of the comparable sales as well to document the curb appeal similarities between the subject and the comparable sales.