A home appraisal combines property information, market research and a written explanation of value. Here are the main steps.
Overview
A home appraisal develops a professional value opinion for a defined intended use and effective date. A lender-arranged assignment is one example; private estate, divorce or planning requests have their own instructions.
Key Steps in the Home Appraisal Process
Ordering: For financing, confirm the lender’s ordering process and charges. For a private request, agree on the intended use, scope, fee and delivery estimate with the provider.Property Visit: Where included, the appraiser observes size, condition, rooms, features and renovations, and may take photographs, measurements and a sketch.Research and Analysis: The appraiser reviews recent sales of similar properties in the area (called “comps”) to compare features and prices. They consider neighborhood quality, location, and market trends.Report Preparation: The appraiser compiles the value conclusion and supporting analysis in the report format appropriate to the assignment.Lender Review: A lender evaluates the report as part of its financing process. Discuss any gap between value and purchase price with the professionals handling the transaction.What Appraisers Look For
Property Size and Layout: Square footage, number of bedrooms and bathrooms, garage space, and lot size.Condition and Upgrades: Overall condition of the home, recent renovations, and quality of finishes.Systems and Features: Heating, cooling, plumbing, and electrical systems; presence of appliances and energy-efficient features.Exterior and Curb Appeal: Roof, siding, landscaping, and outdoor amenities.Comparable Sales: Recent sales of similar homes in the neighborhood.Appraisal vs. Inspection
Appraisal: Focuses on the property’s value for the stated intended use.Inspection: Focuses on assessing the home’s condition and identifying potential problems for the buyer.After the Appraisal
Report Delivery: Confirm who will receive the report and how factual questions can be raised.Loan Decision: The lender uses the appraisal to decide whether to approve, adjust, or deny the loan.