HOW TO READ AN APPRAISAL

An appraisal is a valuation of a property based upon a specific date of that evaluation.  It provides an estimate of the market price of that property based upon what it would sell for in the marketplace on that specific date.

Appraisals are not perfect.  You could have 10 different licensed and quality appraisal companies each evaluate the property and you could get 10 different answers on the value.  An appraiser takes the complete information of that property and uses a comparative approach to obtain a valuation.

In coming up with a valuation they are actually not reviewing the house at all, but rather taking all the specifics of the house (bedrooms, bathroom, square footage, appeal, view, condition, etc.) and then comparing that to other houses in the current marketplace that already sold.

Therefore the value of YOUR home is really based on what other homes in the area have sold for recently.  This is called the Comparable Approach.  Here’s a copy of the most important page of an appraisal.

1. This shows the date of sale for the comparable properties. Usually no more than 90 days.
2. This shows the site square footage. Sometimes there is value for the land that the property is on. The appraiser adjusted the other properties value according to what he felt was the value difference of the lot.
3. This show the condition of the property and the opinion of the condition of our property compared to the other properties.
4. Probably the most significant comparison is the # of bedroom, bathroom and square footage.
5. If there are differences in the air conditioning or heating units they will adjust for.
6. Garage Square footage cannot be used for valuation but # of spaces and the quality of the garage can be used.
7. Final Value at $1,300,000 is the result of the adjustments on the other sales.

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