Frequently Asked Questions

What is an appraisal?

An appraisal is a thought process that leads to an estimate of value for property or a settlement. This estimate or opinion is obtained through a formal research and inspection process that typically uses the three "common approaches to value," which are:

• The Cost Approach - is the cost to replace the improvements, less physical deterioration and other factors, plus the land value.
• The Sales Comparison Approach - involves making a comparison to other nearby and similar properties which recently have been sold. This method is usually the most accurate and best indicator of value for any residential property.
• The Income Approach - is the most important approach in appraising income producing properties. It involves estimating what an investor would pay based on the income produced by the property.

Why would I need a home appraisal?

There are various reasons to get an appraisal. The most common would be for real estate transactions and mortgage transactions. Other reasons for requesting an appraisal can be:

• To obtain a loan
• To lower your tax burden
• To contest high property taxes
• To settle an estate
• To determine an accurate price when selling real estate
• To determine the replacement cost of insurance
• For lawsuit purposes
• Government agency, such as the IRS, requires it

What is the difference between a home appraisal and home inspection?

The role of the home appraiser is to provide a professional opinion, usually an estimate of market value, to be used in making real estate decisions. Whereas in a home inspection, it is an objective visual examination of the physical structure and systems of a house, an appraisal is not a home inspection and a home inspection is not an appraisal. Keep in mind that the approval/acceptance of a home by a lender is not an endorsement of the home's physical condition.