Your Appraisal, Explained Step by Step

The report identifies the client, intended users, intended use, effective date, value definition, and scope of work. These elements establish the question the appraisal is designed to answer.

A current-value appraisal and a retrospective date-of-death appraisal may concern the same property but require different effective dates, research, and market evidence.

The appraiser researches and describes property characteristics relevant to the assignment, which may include the site, living area, design, condition, quality, room count, amenities, access, zoning, neighborhood influences, and other market-sensitive features.

An appraisal observation is not the same as a home inspection. It is performed to collect information needed for valuation, not to provide a technical evaluation of every building system.

Market analysis considers the competitive environment surrounding the subject property. Relevant information can include supply, demand, sales activity, listing competition, exposure time, concessions, and price trends.

Broad county or metropolitan statistics may not accurately describe the subject's particular market segment, so the analysis focuses on evidence relevant to competing properties.

Comparable sales are selected for meaningful competitive similarity. The closest or newest sale is not automatically the best comparison. Location, design, size, condition, quality, site characteristics, amenities, sale terms, and buyer alternatives may all be relevant.

Transaction details are researched and verified so the appraiser can understand the circumstances of each sale and determine how useful it is within the analysis.

When a comparable differs meaningfully from the subject, an adjustment may be used to reflect the market's reaction to that difference. An inferior comparable is generally adjusted upward, while a superior comparable is generally adjusted downward.

An adjustment does not necessarily equal the construction cost or retail price of an improvement. It reflects market-supported contributory value within the context of the assignment.

Reconciliation considers the quality, reliability, and relevance of the available evidence. The final opinion is not required to be a simple average of comparable sale prices or adjusted indications.

Greater weight may be given to evidence that is better verified, more similar to the subject, requires fewer subjective adjustments, or more closely reflects the actions of typical market participants.