Home Appraisal Process Step by Step.

By
Real Estate Broker/Owner with DMK Real Estate Ct RE Broker 0789963
http://actvra.in/4wxW

Home Appraisal Process Step by Step.

As real estate agents we understand the why what and when's for an appraisal done but let’s take a look at the process required to achieve the appraisal report.

The Home Appraisal process of valuation is a long complicated set of procedures but here let’s try to break it down into eight basic elements from the appraiser’s point of view.

1. DEFINITIOIN OF THE PROBLEM.

  • Identify the client and the intended user of the report.
  • Identify the intended use of the report.
  • State the type of value and which definition applicable.
  • Effective date of the appraiser’s opinions & conclusions.
  • Identify the characteristics of the property.
  • Any extraordinary assumptions for the assignment?
  • Any hyporthetical conditions for the assignment?

2. DETERMINE THE SCOPE OF THE WORK.

  • Decide which data is needed.
  • Identify the source of data.
  • Who personnel are needed.
  • Time schedule.
  • Flow chart to keep track of work done.
  • Present fee proposal, agreed upon fee and sign contract.

3. DATA COLLECTION & PROPERTY DESCRIPTION.

  • Market Area Data ~ general characteristics of region, city, and neighborhood.
  • Subject Property Data ~ Specific characteristics of land, improvements, assets, etc.
  • Comparable Property Data ~ Sales, Listings, pending, vacancies, cost & depreciation, capitalization rates, income & expense etc.

4. DATA ANALYSIS.

  • Market Analysis ~ Demand & Supply reports, marketability studies.
  • Highest & Best Use Analysis ~ Site as though vacant, Ideal Improvement, Property as improved.

5. LAND (SITE) VALUE OPINION.

  • Sales comparison approach
  • Allocation procedure
  • Extraction method
  • Subdivision development method
  • Land residual technique
  • Capitalization of ground rental

6. APPLICATION OF THE APPROACHES TO VALUE

  • COST ~ What would it cost to reproduce subject property at today’s cost.
  • SALES COMPARISON ~ Sufficient specific data on sales, listings, offers and vacancies.
  • INCOME ~ Usually for rentals, collect data on income & expenses, Capitalizations Rates, etc.

7. RECONCILIATIOINOF VALUE INDICATIONS & FINAL OPINION OF VALUE.

  • To derive a final reconciliation estimate of value of the property on that date of appraisal.

8. REPORT OF FINAL OPINION OF VALUE & CONCLUSIONS.

  • Produce an appraisal report containing the minimum of:
  • Identify client
  • Intended user
  • Intended use of report
  • Identification of real estate
  • Interest of the property appraised
  • Type of value estimated
  • Effective date of the value opinion
  • Date of the report
  • Scope of work
  • Data analyzed
  • Techniques employed
  • All extraordinary assumptions
  • All hypothetical conditions
  • Signed certificate.

If you like to learn more on the appraisal process go to The Appraisal Foundation the source of appraisal standards and appraiser qualifications.

 

 

  

David Popoff is a certified “Green” Realtor in lower Fairfield County, Connecticut.

cell 203-228-0646

email DavidPopoffCT@hotmail.com

 

 

DMK Property Management llc is locally owned company serving lower Fairfield County, Connecticut.

Specializing in Residential Property Management that can custom tailor a program to fit the homeowners needs be it short term or long term from rental management to full estate management.

Posted by

David Popoff
Connecticut Licensed Real Estate Broker
Realtor® Green
Seller Representative Specialist
Accredited Buyer Representative
candidate
LEED AP Homes

 

DMK Real Estate, Darien, CT.
Cell (203) 228-0646
DMKrealestate.com

 

 

 

DMK Realty, 06820 

 

 

 

 

Facebook    Twitter    Linked in

 

 

 

  AFFILIATED ORGANIZATIONS

click on logo to go to website

 

                                           

                      

 

 

 

Find David Popoff Ct on Google+
close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 02/10/2013 07:29 PM
Topic:
Real Estate Best Practices
Location:
Connecticut Fairfield County Norwalk
Groups:
Mortgages
Connecticut Professionals
The Ninety-ninth Percentile
Diary of a Realtor
William Pitt Sotheby's International Realty
Tags:
real estate ce class
ct brokers class
appraiser 101

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
2,089,694
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

If all appraisers do the work to this level, the price they get paid is a bargain. Unfortunately, not all do their work to this level.

Jan 31, 2013 10:05 PM #1
Rainmaker
872,717
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT
David - Are you going for your brokers license? I've always wanted to take the courses on appraisal.
Jan 31, 2013 10:46 PM #2
Rainmaker
762,077
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Joe unfortunately you take the good with the bad and many of the problems start with the mortgage warehouse that you have to go through now.

Gail always good to have a little extra knowledge to help out your clients.

Feb 01, 2013 03:01 AM #3
Ambassador
2,070,165
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

You picked a topic that calls for deep breathing and perhaps a gin and tonic! We just had the last one come through $500 over the selling price..............I think it was about 20k too low!!!!!

Feb 01, 2013 07:44 AM #4
Rainmaker
105,191
Kelly Klein
Berkshire Hathaway HomeServices | Pen Fed Realty - Santa Rosa Beach, FL
"Doing Great Things Today to Improve Tomorrow"

David,

Representing buyers for a living, I am always happy when one comes in higher than what my buyers have paid for the property. 

Good article.

Kelly

Feb 01, 2013 08:04 PM #5
Rainer
1,756,848
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi David.  The most important area is that the appraiser be geographically proficient.  USPAP now requires it.

Feb 01, 2013 08:27 PM #6
Rainmaker
762,077
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Remember the appraisal is an "opinion of price" .

Feb 01, 2013 10:30 PM #7
Rainmaker
1,206,569
Wayne and Jean Marie Zuhl
Hallmark Realtors - Clark, NJ
The Last Names You'll Ever Need in Real Estate

Great information, David - all buyers should read this!

Feb 02, 2013 04:23 AM #8
Rainmaker
4,272,268
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

This is a very good reference guide for real estate agents.  Thanks for sharing.

Feb 02, 2013 05:55 AM #9
Rainmaker
1,152,483
Michelle Cooks
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

Why does an appraiser want the sales price or see the contract if they are unbiased. IMHO they should do it from scratch just like agents

Feb 03, 2013 06:51 AM #10
Rainmaker
3,931,810
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

A great breakdown of the appraisal process, David.  Many people should know just how this process works.

Feb 03, 2013 07:53 PM #11
Rainer
224,942
Didi Doolittle
Slifer Smith & Frampton Real Estate, Eagle Office - Vail, CO
Vail, CO Realtor 970.232.8225

Very informative outline of appraisals, David.  Thanks!

Feb 05, 2013 03:13 AM #12
Rainmaker
762,077
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct
Best to know where the appraiser is coming from to work together better.
Feb 09, 2013 06:16 AM #13
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
762,077

David Popoff

Realtor®,SRS, Green ~ Fairfield County, Ct
Need Help? Ask me a question.
*
*
*
*
Spam prevention

Additional Information