What Is Involved In A Real Estate Appraisal?

A real estate appraisal is an unbiased professional assessment that determines a property’s fair market value, typically conducted by a licensed or certified appraiser on behalf of mortgage lenders.

The Inspection Process

The appraiser conducts a visual inspection of both the home’s interior and exterior, walking through the property and grounds. During this walkthrough, which typically takes about an hour, the appraiser photographs all rooms, measures square footage, counts bedrooms and bathrooms, and assesses the overall condition of the property. They examine key structural elements including the foundation, roof, HVAC system, plumbing, electrical systems, and appliances, looking for visible defects or safety hazards.

Comparable Properties Analysis

After inspecting the property, the appraiser researches recently sold homes in the area—typically within the past six months—that have similar characteristics to the subject property. Using databases like the Multiple Listing Service (MLS), tax records, and public land records, they compare features such as location, size, age, condition, and amenities to establish a baseline value. The appraiser then makes adjustments to these comparable sales based on differences with the appraised property.

Key Factors Evaluated

Appraisers consider multiple dimensions when determining value, including the property’s location, neighborhood characteristics, square footage, lot size, number of rooms, condition and age of major systems, recent renovations, special amenities (pools, fireplaces, garages), school district quality, and accessibility to transportation. They also review real estate taxes, homeowners association fees, and current market trends in the area.

The Final Report

The appraisal report includes a street map showing the property location, an exterior building sketch with square footage calculations, photographs of the home’s front and back as well as interior rooms, photos of comparable properties, and all supporting data used to determine the fair market value. The appraiser delivers this formal report to the mortgage lender, typically within a few weeks of the inspection.