My New Blog

“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 inspections.)

“So what exactly happens when you come out to appraise my house?” Glad you asked!

First, there 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.

  1. 99% of the time I will be on time. If not I will call you and let you know.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. When I am done on the interior, I am done gathering specific field data for your house.

  9. 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:

  1. The order came in with very specific instructions for me.

  2. A file was set up.

  3. Tax information, Zoning information, GIS maps, location maps, listing history and sale history was reviewed.

  4. A study was done of your neighborhood. The range of values, uses and ages for the area was determined.

  5. Data was entered into my appraisal software.

“Is that it?”

Back in the office:

  1. Field data is entered into the appraisal report.

  2. And then the market data is researched. The market determines the value of your home.

  3. 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.

  4. These sales are compared to your home. Thus the name “comparables” or

  5. Wikipedia Describes what Comparables are fairly well:

           Five factors 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 performed?

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 financing.

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.

  1. I will make adjustments to the comparables so that the value influencing factors are equal to your house.

  2. 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.

  3. Two other forms of valuation can be used if applicable. The cost approach and Income approach. (That’s for another blog.)

Finally, I 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.

To answer 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!

David S. Massey
State Certified General Appraiser

Email me:

Posted by David Massey on November 1st, 2014 10:59 AM

Third Party Sources of Value

“But X website states my home is worth $X!” In both my Real Estate Appraisal and Real Estate Brokerage business this discussion happens on a weekly basis.

On the brokerage side when we receive very low offers, I check these Internet Sites and see if the offering is based on one of these websites. Often they are the same. As an Appraiser, the debate will arise if there is an appeal of the appraisal report’s market value. “But the Internet states my home is worth much more than your appraisal.”

Let’s look a little deeper into these third party websites that offer estimates or guesstimates. While I admire the effort to educate consumers, the variables are far too vast for these websites. I will admit that sometimes they are pretty close to correct, but not often.

A very simplistic explanation for the inaccuracy is the old saying I learned in Computer Science 30+ years ago is GIGO, Garbage in, Garbage out. These sites pull data from a variety of sources. Tax records, public records, sometimes Multiple Listing Data and whatever sources they can manage to gather data. The problems I see more often than not are incorrect square footages and inaccurate room counts (bedrooms, baths and so forth.) Their algorithms simply will not work without accurate data.

Last week I appraised a 1,700 Square foot ranch with an unfinished basement at $160,000.00.  The Room Count was 7 Total Rooms, 3 Bedrooms, Two full baths and one half bath. As a matter of checking myself, I glance and see how close my square footage calculation matches the MLS sheet, tax records and yes sometimes I even check out these popular websites.

I did with this house and was amazed at what I found. One website stated the house had 10 Rooms 4 baths and 3,400 square feet! The “estimated” value was over $300,000.00!

While these 3rd party sites are interesting, I certainly would not rely on them for an accurate market value of my home. I do see more potential with these sites at seeing what is on the market for sale around your home. If the data is accurate this helps to see what your house would be competing against in the market.

For an accurate market value, hire a Certified Appraiser that is familiar with your market. I am doing more pre-listing work for Realtors and Individuals than I have in the past 30 years.

Perhaps these third party sites are helping my business!

David S. Massey

State Certified General Appraiser – NC

Posted in:General
Posted by David Massey on June 29th, 2014 11:06 AM

Not a week goes by that I do not have this question asked of me. "Why did you not include my basement in your square footage."

Simple answer, "I did."

Realtors, Homeowners and other Client's often and understandably misunderstand how basements are handled on a Real Estate Appraisal.

 Basement areas are defined by law as any area of a house that is below grade in any amount. Grade is ground or soil. Even if one exterior wall is partially below grade (ground level) it is considered a basement and cannot be included in the “Above Grade Living Area.”

It is however included in the appraisal on the separate line item below the above grade square footage. This is found on Page 2 of the URAR Form. It is located in the middle of the Sales Comparison Approach. Here is the segregation: Above Grade Room Count : 8 3 2.1 (8 rooms, 3 bedrooms and 2 full baths and a 1/2 bath) Gross Living Area: 1,800 Square Feet (Above the ground) Basement & Finished Rooms Below Grade: 1,800 Square Feet (Below the ground or grade) The house being appraised has 1,800 SF of above grade living area and 1,800 SF of below grade living area.

Now for the confusing part. One would logically think, "Ok my house has 3,600 SF of heated living area." And frankly it does, but it would create a misleading report if the Appraiser compared your 1,800 SF house with an 1,800 SF Basement with a 3,600 SF house all above grade. In our market buyers pay less for below grade living areas.

More information can be found on the NC Carolina Real Estate Commission's Website by clicking here:

 I hope this helps. It is confusing and frustrating for both homeowners, appraisers and particularly real estate agents who routinely will include the basement in the above grade living area. But it is the way we as Professionals are required by law to perform our work.

David S. Massey President Massey Real Estate and Appraisals
State Certified General Real Estate Appraiser A2912

Posted in:General
Posted by David Massey on March 30th, 2014 4:38 PM