The appraisal process will begin with a request for value. The purpose of the assignment is critical to identify for the appraiser to determine the scope of work necessary to achieve credible results. In addition, the fee required for the assignment, timeline and delivery method of the assignment results will be agreed upon. A formal signed engagement letter will be required for the assignment to commence.
Most home appraisals will require an onsite appraisal inspection visit. In order to confirm the recorded square footage of the property, the appraiser will create a sketch of the floorplan. Your appraiser will begin by measuring the exterior of the first floor of the dwelling. During the exterior observation, the appraiser is notating the materials and condition of the building and site conditions. Upon completion, the appraiser will move to the interior of the home. The appraiser will need access to all rooms, bedrooms, bathrooms, garage and on occasion, the attic space.
If there is a second story, the appraiser will measure it from the interior. While inspecting the interior the appraiser will notate the material and condition of the inside of the dwelling. Photographs of all areas observed will be taken. Most importantly, any obvious amenities or defects will be identified in order to analyze the effect on the value of the property. Useful information for the appraiser would be a copy of the most recent survey (if available,) a list of any improvements completed including approximate date and cost as well as information on HOA/POA and fees if applicable.
The appraiser will determine the applicable valuation methods to utilize in order to derive market value of the property. These include the sales comparison approach, cost approach and the income approach. The appraiser will use data from local realtor multiple listing services (mls) to determine the best comparable sales (or rentals if applicable.) Analysis on these comparables will be made and any differences will be adjusted for in the sales grid of the report.
This will be used to determine the sales comparison approach (and/or income approach if applicable.) site value is derived either from comparable land sales or site allocation method if limited/no sales data is available. Appraiser will utilize the site value alongside a cost data service to determine the cost approach. After analyzing all market data for your property, one, two or all three of these methods will be used, reconciled and a final market value of your property will be provided.
