“Is that it?”
I hear this
question often after my interior inspection of a property during my appraisal
process. My 30 years plus of experience and technology has enabled me to inspect
the interior of most homes in 15-30 minutes. “Is that it?” Well no of course
not. During the inspection I am gathering my field data on the condition,
quality, materials used, updates, maintenance, layout, floor plan and other
value influencing items that are a part of your real property.
I have a
checklist of items on my sketch page that allow checking off items instead of
writing. My sketch page is to scale. (Yes I still use pen and ink for my
exactly happens when you come out to appraise my house?” Glad you asked!
is no need to be nervous about the appraiser looking at your house. I am not
there to grade your housekeeping skills or how OCD you are or are not about
your closets. I’m simply gathering data to then formulate the appraisal report.
99% of the time I will be on time. If
not I will call you and let you know.
When I arrive, I will ring your door
bell and introduce myself and most of the time another State Certified Real
Estate Appraiser from my office is with me.
We will then measure the outside of
your house. This will allow me to calculate the square footage and to draw your
interior floor plan. High tech laser measuring devices have sped up this
process greatly over the old metal tape measures.
I’m marking my checklist on the exterior
features, quality and condition. Materials used in constructing your house, type
of windows, roof type, gutters, HVAC type, slab or crawl space. Porches, decks,
patios, pools, fences, exterior amenities.
Then back to your front door. It’s me
again. Ready to do the same on the interior. I will draw your floor plan; check
off the materials in your house and condition. Make of note of any value enhancing
items and conversely any deferred maintenance or repair items.
I will ask if you have updated your
kitchen and baths. When? Have you done any work to the house during the past? The most helpful item a homeowner or Realtor
can provide the Appraiser is a list of such items.
And yes I will be making interior
photos. I have been doing that since Digital Cameras hit the market. The reason
is three-fold, one to help me remember your house better, two is to have proof
in my work file the condition of your house when I did my inspection and lastly
now I am required by my clients to take interior photos.
When I am done on the interior, I am
done gathering specific field data for your house.
And I am off to my next appointment.
“Is that it?”
Well, no. I
wish that was it. But before I came to your house several events took place:
The order came in with very specific
instructions for me.
A file was set up.
Tax information, Zoning information, GIS
maps, location maps, listing history and sale history was reviewed.
A study was done of your
neighborhood. The range of values, uses and ages for the area was determined.
Data was entered into my appraisal
Back in the
Field data is entered into the
And then the market data is
researched. The market determines the value of your home.
I will find at least three properties
in your area that are most like your house that have some ideally within the
past 3 months, but in my market it is usually 12 months.
These sales are compared to your
home. Thus the name “comparables” or
Wikipedia Describes what Comparables
are fairly well:
are usually considered when determining comparables:
Conditions of Sale—Did the comparable recently transact
under conditions (e.g. -- arms length, distress sale, estate settlement) which
are consistent with the standard of value under which the appraisal is being
Financing Conditions—Was the comparable transaction
influenced by non-market or other favorable (or even unfavorable) financing
terms? For example, if the comparable sold with a below-market interest rate
provided by the seller, and if the standard of value (e.g. -- market value)
assumes no such abnormal financing, then the appraiser may need to adjust the
comparable price by an amount equal to the estimated impact of the favorable
Market Conditions—This is often referred to as the time
adjustment and accounts for changing prices over time.
Locational Comparability—Are the comparable and the subject
property influenced by the same locational characteristics? For example, even
two houses in the same neighborhood may have different views which cause one to
be more valuable than the other.
Physical Comparability—This includes such factors as size,
condition, quality, and age.
I will make adjustments to
the comparables so that the value influencing factors are equal to your house.
This process is called the Sales
Comparison Approach to value. It is usually the most reliable form of valuation
as it shows actual buyers and sellers’ actions in the market.
Two other forms of valuation can be
used if applicable. The cost approach and Income approach. (That’s for another
will reconcile the market data to determine a final valuation of your home.
Then in most
cases the report is uploaded to my client, who will then review the appraisal
and sometimes ask for clarifications to the report.
your questions, “Is that it?” No, it’s a lot of work, analysis and time goes
into that 15-30 minute inspection to produce a credible and reliable 20-30 page report. But I love it!
State Certified General Appraiser
Email me: email@example.com