What Does the Residential Appraisal Process Look Like?

  1. Inspection:

    Notes quality, condition, finishes. Includes measuring and photographing the property.

  2. Floorplan:

    Draw computerized sketch of the house, checking the overall size against Public Records.

  3. Market Conditions:

    Review market conditions in the subject’s area. This is done be reviewing changes in the median prices, number of sales, and “days on market” over the last several years. This also includes a determination whether there is an over-supply by reviewing the current number of listings, pending, withdrawn/cancelled listings, and sales. The changes in price per SF can be graphed.

  4. Comparable Sales Search:

    Looking at the sales that closed nearest the date of valuation, as close as possible to the subject, which bracket as many elements of the subject property as possible, including view, lot and house utility, size of the lot and house, room count, quality, condition, and level of updating, expansion potential.

  5. Sales Comparison Grid:

    Most often sales are arrayed on a grid, where adjustments are made for differences in order to narrow down the value range.

  6. Reconciling The Value Conclusion:

    The value conclusion reached by the Sales Comparison grid is reconciled against any other applicable approaches to value, such as the Income Approach, which takes into account the value of the rental income to the average investor, and Cost Approach, which considers the value of the lot and what it would cost to rebuild the house. Market conditions also taken into account when all information is reconciled to a final conclusion of value.

  7. Report Assemblage:

    The report should clearly demonstrate the process that was used to form a value conclusion. Floorplans, photos, maps, and any other relevant data are included. Report is proofed for clarity and accuracy.

Susan Overton; May – 2009