How Does the Appraiser Arrive at a Value? 


The appraiser completes a physical inspection of the property. He(she) inspects the building interior, building exterior, and the site; taking note of quality of materials and workmanship, finish details, and other factors affecting the property’s value. The appraiser conducts research to compile a sales and listing history of the property, and background on repairs and improvements to the property. This might involve interviews with the owner and real estate sales agents. The appraiser researches real estate assessment information to confirm site size, past ownership history, and additional property information.


The appraiser locates 3 to 6 other, comparable, properties which have sold and closed during the preceding 6 to 8 months. These properties must be similarly located, and must be similar to the subject for design, age and condition. The appraiser researches the comparable properties for details of quality, condition, and sale in order to ascertain any elements affecting the sales price. This process may involve interviews with the seller, the purchaser, or the real estate agents involved. The appraiser researches real estate assessment information to compile additional physical information and ownership history for each comparable sale.


The appraiser judges which comparable properties will be used for the comparable analysis and which are not suitable for comparable analysis. The appraiser breaks down the subject property and each comparable property into ten or more components for comparison. Each component of each comparable property is compared to the corresponding component of the subject property. The appraiser makes a monetary adjustment to account for differences in each component. The result of this comparison results in an indicated value for the subject property.


The appraiser is legally required to ascertain the needs of his client and then determine the appropriate value reporting method. The appraiser may provide a:

Verbal Valuation: A written report is not provided; however, the appraiser maintains a complete file of the analysis.

Written Report: Letter format, or Summary Report; in letter form or on one of several types of mortgage forms.

Full Narrative Report: A very detailed report including all aspects of the appraisal process.

Whenever an appraiser provides an opinion of value, he is legally required to maintain a file containing all details of the appraisal process for a period of five years.