1) Do appraisers follow any rules?

The Appraisal Standards Board (ASB) sets forth the rules for developing an appraisal and reporting its results. In addition, it promotes the use, understanding and enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP). FIRREA requires that real estate appraisals used in conjunction with federally-related transactions be performed in accordance with USPAP. More than 80,000 state certified and licensed appraisers are currently required to adhere to USPAP. USPAP contains the recognized standards of practice for real estate, personal property and business appraisal. The authority of USPAP extends beyond FIRREA. Since 1992, the Office of Management and Budget (OMB) has required federal land acquisition and direct lending agencies to use appraisals in conformance with USPAP.

2) What is a comparable sale?

A comparable sale is a property that is similar to the subject property in most respects, is located in a similar (nearby) location, and has sold recently at arm's length. The selection of comparable sales is in most residential appraisals, the single most important determining factor in establishing value. It is the appraisers’ responsibility to adequately research the local real estate market and determine which comparable sales best represent the value characteristics of the subject property.

3) Can I get a copy of the appraisal?

Under the Equal Credit Opportunity Act, your lender must provide you with a copy of the appraisal report upon your written request. If you are dissatisfied with any information contained in your appraisal report, you should contact your lender immediately.

4) If the appraisal comes in higher than my tax value, could my real estate taxes go up?

Absolutely not! The appraiser is required to maintain confidentiality with the client, which would typically be you (if you undertook the appraisal) or the bank (in a mortgage related appraisal), not the local tax authorities.

5) What improvements add the most value to my home?

Just how much any particular individual improvement might add to your home's market value, what appraisers typically call the contributory value, can often vary widely from market to market, dictated by the wants and needs of each neighborhood. However, a local appraiser familiar with your market can help you figure out the best home-improvement value. Check out Remodeling On-Line's Cost Vs. Value Report which features some information on how improvements might increase the value of your home from market to market.

6) What does the appraiser look for?

Typically, an appraiser needs to document the condition of the property, both inside and out, from the layout and features to degree of modernization including any updates as well as the overall quality of construction. This information will help to assist the appraiser throughout the valuation and comparison process. The appraiser estimates the square footage (GLA - gross living area), by measuring the exterior of the home. Non-living areas, such as garages or covered porches, are not included in GLA, but are accounted for and considered in value separately. Finished basements are also calculated separately from the above-ground GLA. The local market will dictate the contributory value of the finished basement, which can be influenced by governmental regulations, the degree of modernization, the quality of the finish, and other factors. The appraiser will generally consider only permanent fixtures and real property. Because many above-ground swimming pools and small sheds are not permanent structures, they typically usually aren't included in the valuation. Depending on the specific installation process and local custom, however, an above ground pool or small shed might be considered part of the real property.

7) Appraiser vs. home inspector. What is the difference?

The appraiser is not a whole house inspector, engineer, architect, electrician, plumber, H.V.A.C. technician or contractor. The appraiser briefly walks through the house to get an idea of the general condition and room count. An appraisal is not a guarantee of condition. The appraiser will ask about any visible problems and those which may not be visible, and will do his/her best to gauge any impact on value attributable to those problems. You are encouraged to seek the advice of experts if you have any questions about the structural or mechanical aspects.

8) Where does an appraiser get the information necessary to complete the appraisal?

The appraiser gets his or her information from a wide variety of sources, including the local Multiple Listing Service, local tax assessors’ records, local real estate professionals, county courthouse records, private public record data vendors, interviews with sellers and buyers, appraisal data co-operatives and his or her own personal knowledge or office files from previous appraisals. The quality and reliability of each piece of information is considered by the appraiser.

9) How long does an appraisal take?

The physical inspection of the real property being appraised can take from approximately fifteen minutes to several hours, depending upon the size and complexity involved. After the initial inspection of the property the appraiser spends time touring through the neighborhood or area. The purpose of this tour is to search for comparable sales (other properties that are similar to the property being appraised) that have sold within the last six months to a year or so. When the field work is finished, the appraiser completes the report at his office. The report can consist of a short form report (typically under ten pages) to a long narrative report which can sometimes exceed a hundred pages. A short form report usually takes between three to six hours to complete. A narrative report can take weeks or sometimes even months, depending upon the complexity of the assignment.

10) What makes an appraiser qualified?

Many states require all real estate appraisers to be, at a minimum, state licensed or states certified and have fulfilled rigorous education and experience requirements and must adhere to strict industry standards and a professional code of ethics as promulgated by the Appraisal Foundation.