An inspection is just one of the many tasks performed by an appraiser. Appraisers must be familiar with the property inspection process, and observe the components and characteristics of the subject property that will influence value in the marketplace.1 The appraiser’s inspection takes into account a number of elements including:
- the physical characteristics of the dwelling and any outbuilding;
- interior/exterior finishes and systems (e.g. heating and cooling);
- the quality of the improvements; and,
- any deficiencies or required repairs.
In addition to understanding the dynamics of the real estate market, designated appraisers also have construction skills and knowledge, which are fundamental to their training. Members also rely on the expertise of industry professionals where building characteristics are more complex.
Whether it is the consumer or the lending institution that engages an appraiser to value your home, the appraiser will:
set a convenient time for an inspection;
plan for 20-40 minutes or more for the inspection depending on the size and characteristics of the property;
collect as much information as possible during the inspection of the home on the interior and exterior of the property (e.g. room layout, improvements, dwelling measurements, information on any outbuildings or garage, site improvements, etc.).
take photographs to provide a visual representation of the data described in the report. Exterior photographs are important to clearly identify the property and its characteristics. Sometimes, interior photographs are requested by the appraiser’s client.
ask you about important features of your property such as the original date of construction, dates of any major additions or renovations, and extra features, to name a few.
gather information about recent marketing activity on your home. While public information is often available, the appraiser may inquire about any listings of the property (including private listings) or offers to purchase in the past twelve months, as well as any sales of the property for the previous three years
Consumers often want a preliminary estimate of value before the appraiser leaves the property. It is important for consumers to be aware that most of the valuation process occurs after the inspection. The inspection allows the appraiser to gather sufficient information to properly describe the property.
Estimating the market value requires the appraiser to complete a thorough analysis of market conditions and market activity. It is often a complex process that involves collecting and analyzing between 3 and 10 (or more) comparable properties in order to form a reliable estimate of market value. As a consumer, this is what you are paying for: an independent and unbiased opinion of value by a qualified appraisal professional.