Appraisers and What They Look For

Appraisers play a critical role in the home buying and selling process by determining the fair market value of a property. They consider a wide range of factors when conducting their evaluation. Here's a list of what appraisers typically look for when appraising a property:

1. Property Condition: Appraisers assess the overall condition of the property, both inside and outside. They note any visible defects, such as structural issues, water damage, or the need for significant repairs.

2. Size and Square Footage: They measure the property to determine its size and square footage accurately, including both the living space and any additional structures like garages or sheds.

3. Layout and Design: Appraisers consider the property's layout and design, including the number of bedrooms and bathrooms, the flow of living spaces, and the overall functionality.

4. Property Age: The age of the property can impact its value. Older homes may have unique features or architectural styles that add to their value or require special consideration.

5. Upgrades and Renovations: Appraisers assess any upgrades or renovations made to the property, such as kitchen remodels, bathroom upgrades, or additions. These improvements can positively affect the property's value.

6. Comparable Sales (Comps): They analyze recent sales of similar properties in the same area to establish a baseline value for the subject property. These comparable sales help determine market trends and price adjustments.

7. Location: The property's location is a significant factor. Appraisers consider the neighborhood, proximity to amenities, schools, public transportation, and overall desirability of the area.

8. Lot Size and Landscaping: They assess the size of the lot, the quality of landscaping, and any outdoor features like patios, decks, or pools. A larger or well-maintained lot can add value.

9. Amenities and Features: Appraisers consider the presence of amenities like fireplaces, energy-efficient features, smart home technology, and other special features that can impact value.

10. Comparable Market Analysis (CMA): In addition to comps, appraisers may also perform a Comparable Market Analysis to evaluate the competitive market landscape and adjust their valuation accordingly.

11. Zoning and Legal Considerations: They check local zoning regulations and legal aspects that could affect the property's use or value, such as easements or encroachments.

12. Market Conditions: Appraisers factor in the current state of the real estate market, including supply and demand, interest rates, and economic conditions.

13. Health and Safety: They assess health and safety issues, such as code violations, hazardous materials, or safety concerns that could affect the property's value.

14. Appraisal Methodology: Appraisers typically use one of three approaches to valuation: the sales comparison approach (comps), the cost approach (replacement cost), or the income approach (for income-generating properties). The choice of approach depends on the property type and the availability of data.

Remember that appraisers must follow established appraisal standards and guidelines, and their primary objective is to provide an unbiased, accurate estimate of a property's value. The appraisal report is a critical document used by lenders to determine loan amounts, by buyers to assess the value of their investment, and by sellers to set an appropriate listing price.