What is the role of a residential appraiser?
A residential appraiser is a professional at estimating an opinion of value of a property. Appraisers must abide to a certain code of ethics which includes giving an unbiased and objective appraisal. We are committed to following and being in compliance with the Uniform Standards of Professional Appraisal Practice (“USPAP”). Appraisers must take a refresher course once every two years to maintain their license and keep up to date with any changes. The purpose of “USPAP” is to “promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers.” Therefore, appraisers cannot be influenced to hit a certain value as their objectiveness will have been compromised.
How do appraisers determine their opinion of value?
There are three approaches that appraisers can take to determine the opinion of value: The Sales Comparison Approach, Cost Approach, and Income Approach. The Sales Comparison Approach uses similar sales or listings within the subject’s area to determine what the market is selling and buying for. Adjustments are made to the comparables whenever differences are found. These adjustments rely on the comparable data the appraisers research and their knowledge of the market area. The Cost Approach is developed by estimating how much it would cost to rebuild and replace the current structure with a structure made in a similar manner. This approach is more common with new construction builds but less reliable with older homes. The Income Approach is used for properties that generate income such as multi-unit properties and rental properties. This approach uses the income data to calculate an estimate of the opinion of value. One of these, or any combination of these approaches, may be used in the appraiser’s final reconciliation of opinion of value.
What is the process of an appraisal?
Once an appraisal has been ordered, we begin the initial research to ensure that our appraisers are competent for the assignment. From there, an inspection will take place at the property and a report will be started immediately after. Completed reports are sent as a PDF to the client typically within a few business days after the inspection for residential appraisals. Commercial appraisals may take more time to complete.
What format will my appraisal be in?
When performing an appraisal for an individual for a residential appraisal we are required to use a form type called “General Purpose.” We will deliver a PDF copy of the report to you by email. This report cannot be submitted to a lender for a loan. The only time we can complete appraisals for loan purposes is when a lender orders the appraisal directly. Commercial appraisals will typically be completed on Word and Excel documents.
What will the appraiser’s inspection consist of?
For residential, the appraiser will typically only need 30 minutes or less at your house depending on the size and complexity of the property. He or she will go room by room to take notes of any upgrades or deferred maintenance. As they inspect, they will take photos of each room. Once they have completed their interior inspection, they measure the exterior of the property to complete a floor plan including the layout of the rooms.
It’s important to note that an appraiser is not a home inspector or considered to be an expert in any particular aspect of the property. For example, the appraiser may note a roof leak and recommend that a roof inspector visit the property. However, the appraiser is not qualified to estimate the cost of the damage repairs or extent of possible health or safety violations.
Commercial inspections will differ based on the type of property.