Real Estate Appraisals

How Appraisals Work

Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property. A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection. However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property.

Key Factors in an Appraisal

The appraisal provides half the weight in credit decisions involving the real estate security. It should be done by a qualified, licensed appraiser familiar with your neighborhood and property type.

The Site

Location, view, topography, lot size, utilities, zoning, external factors, and more.


Quality of construction, finish work, fixed appliances, and any defining features.


Age, deterioration, renovations, upgrades, and any added features.

Health & Safety

Structural integrity and code compliance are key factors to consider.


Above grade and below grade improvements.


Does the property conform to the rest of the neighborhood?

Functional Utility

Is the property functional as built – style and use?


Garages, carports, shops, and similar spaces should be considered.

Real Estate Appraisal FAQs

  • What is an appraisal?

    An appraisal is an unbiased estimate of the true value of a property at a point in time. When buying a home, an appraisal can confirm whether the property is worth the amount you are paying.

  • Why is an appraisal necessary?

    Most lenders require an appraisal to determine the current market value of a property before they approve a mortgage.

  • Does the lender choose the appraiser?

    Usually, the lender will choose the appraiser, but you are entitled to see the results. Keep in mind that lenders and broker’s agents are not allowed to “up charge” for third party services.

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