Appraisal Basics-How appraisals are done
An appraisal of real estate is the valuation of the property based upon empirical data.The appraisal process interprets the market data to arrive at a value estimate.
The appraiser compiles data pertinent to a report and gives consideration to the site and amenities as well as the physical attributes and condition of the property.
An appraisal is a physical exam of the property in question. An appraiser examines the structure, its soundness, age, condition, and probable value using the sales data of similar properties around it. Usually three most recent and similar sales are used in the report. The closer the sales to the subject, the better the value and its weight given. An appraiser is also deemed to adjust the value for various other factors such living area, lot size, square footage,amenities and upgrades and other proper physical conditions. Data from various sources such as MLS, dataquick and public records is utilized to arrive at the valuation of the property. Appraisers work independently, and in some states are required to be licensed and regulated by State agencies.
Typically in both residential and commercial appraisals an appraiser inspects both the exterior and interior of the subject property. Compares the property to nearby comparable properties that have sold recently, and than estimates its value, based on the sale prices of those similar properties. The appraiser than summarizes his findings in a standardized, formatted appraisal report that is required on a uniformed report under the guidelines.
Considerable research and collection of general and specific data must be accomplished before the appraiser can arrive at a final opinion of value. Residential appraisal in California costs around $350-550 on a single family home and commercial appraisals are in the $1000-5000 range depending on the complexity of the property and usage and income.