What is actually involved in the appraisal process?

The first thing is research the subject property through public records including the MLS, and any other applicable records. Then search for recent sales in the area that are similar to the subject. The subject property as well as the recent sales are then mapped and included for further analysis. Our office then contacts the client or the agent for an appointment time that accommodates all parties involved. At this point our office staff has invested many hours in research, mapping, conversations with the lender, the client or the agent.

When the appraiser leaves the office, he or she will typically drive the area surrounding the property to look for any items that may affect the value or marketability of the subject property. On arrival at the property the appraiser measures and photographs the exterior, as well as any garages, pools, barns, outbuildings, sheds, etc. The interior is then inspected which includes every room. At this time the appraiser notes any special features such as fireplaces, appliances, upgraded flooring or any other items that are possibly unique to the subject property. This process can take as little as 15 minutes or as long as a couple of hours depending on the size and complexity of the property being inspected. A typical inspection takes about 30 minutes.

Do you have to clean your house from top to bottom? No, don't fret over a little dust and a few clothes in the laundry area. We are looking more for items that would require repairs such as holes in the walls, broken windows, a bad roof, etc.

After the property has been inspected, the appraiser will then drive to the comparable sales that have been chosen to be used. There may be as few as three or as many as ten. On their return to the office, the appraiser and our typist discuss the subject as well as the comparable sales that are to be used in the report. The typist inputs all of the information after which the appraiser reviews it and signs it. The report is then typically e-mailed directly to the lender.

The basic purpose of an appraisal is to help in making a real estate decision. An appraisal could be needed in any of the following situations.

• Setting a Price for Buying or Selling
• Setting Collateral Value for Financing
• Assisting in a Financing Decisions
• Determining just Compensation in Condemnation Proceedings
• Assisting in Real Estate and Tax Matters
• Setting Rent Schedules and Lease Provisions
• Determining the Feasibility of a Project
• Assisting in Insurance Matters
• Estimating Liquidation Value for Forced Sale or Auction Proceedings
• Determining Supply and Demand Trends in Market

How long is an appraisal valid?

Supply and demand and market conditions are constantly changing causing values to increase or decrease. In a fairly stable market, an appraisal should be valid for around 4 months.

How can I find a qualified appraiser?

In every profession there are individuals who are recognized as having greater skills and higher abilities than others.  AppraiseOne holds a Certified license.

Do all property values change at the same rate every year?

There are no two neighborhoods that are exactly alike. In one area sales may indicate a 15% change in value in a year. While in another area the rate of change may be only 5%. Even within the same neighborhood. Different types of properties may show different changes. For example, two-story houses may be more in demand then one-story houses. There are many features to be considered in every property which cause the value to differ. Some of the characteristics which can affect value are location, condition, size, amenity type, neighborhood features, traffic, communication, etc.

Is there a difference between selling price and value?

Sometimes. Every day some properties sell at price which is above or below the normal market value. A professional appraisal is an unbiased estimate of value which includes an analysis of past and current sale prices.

Does adding to or renovating my property increase the value?

In most cases, when additions are made or renovations take place, the value will increase. However, the cost of adding the item is not always equal to the value. It will depend on the area, the market demand, quality of construction, workmanship, etc. painting and cosmetic repairs generally yield the greatest return on investment.

What is market value?

Market value is the most probable price for which the property should sell after reasonable exposure in a competitive market with a willing and knowledgeable buyer and seller and assuming a fair and normal sale with no undue pressure upon either party.

How does one determine market value?

Three different methods are generally used in the appraisal process. A brief description of each follows:

Cost Approach: This method involves estimating building cost and deducting for wear and tear, design flaws or location problems. Land value is added to this building cost to derive a value estimate.

Sales Comparison Approach: This method is the most commonly utilized. This approach compares the subject with somewhat similar properties which have recently sold. Adjustments for differences such as overall square footage, condition, bedrooms, bathrooms, garages, pools, and location lead to value indication.

Income Approach: This method analyzes the value of property based on its ability to produce net rental income. The income approach is seldom valid in appraisals of single family residences.

Does the tax assessment indicate current market value?

Not always. There is anywhere from a one to two year lag between the assessment work and publication of assessed value. Assessors appraise hundreds or even thousands of properties in a year. They are not always able to inspect the property and frequently can spend only a few minutes work on each valuation. While many properties sell at prices above the assessed value, some sell below the assessment. In California, proposition 13 limits the amount of yearly growth of assessment value.