What you should know about

Residential Appraisals

Appraisals are an essential part of the home-buying process. An appraisal is an opinion of  value of a property conducted by a state licensed professional appraiser. Lenders require appraisals if buyers are using their homes as collateral for any type of mortgage. Lenders require an appraisal to ensure that the property value is equal to or greater than the amount of the loan.

Appraisals are detailed reports that are based on the appraiser’s evaluation of a property and the evaluation of comparable sales data.  The most common method of valuing residential properties is the sales comparison approach.

In this approach, an appraiser uses similar properties that have recently sold to estimate a property’s market price. These properties are known as comparables. There are no exact properties since each has it’s own unique features. The appraiser must analyze comparable properties with the subject property and make adjustments to ensure that the features match the subject property. This is the value of each comparable property if it had the same elements as the subject property.  These properties are then weighted by relevance to determine the current market value opinion.