A home appraisal is an unbiased opinion of a property’s market value, completed by a licensed appraiser. The process involves an inspection of the property along with an analysis of recent sales and current market conditions.
Property Inspection
The first step is an on-site inspection of the home. During the inspection, the appraiser measures the property to determine gross living area, observes the overall condition, and notes features such as layout, room count, and any updates or improvements. Photos of the interior and exterior are taken, and the site itself is also reviewed.
Most inspections take approximately 30–60 minutes, depending on the size and complexity of the property.
Market Analysis
Following the inspection, recent sales of similar properties in the area are analyzed to determine how the subject property compares in the current market. This includes reviewing location, size, condition, and other characteristics that would influence a typical buyer’s decision.
Adjustments are applied where necessary to reflect differences between the subject property and comparable sales.
Approaches to Value
The primary method used for most residential appraisals is the sales comparison approach. When applicable, the cost approach and income approach may also be considered depending on the property type and assignment.
Appraisal Report
Once the analysis is complete, the appraisal report is prepared. The report includes a description of the property, relevant market data, comparable sales, and the final opinion of value.
What to Expect
There is typically no special preparation required for an appraisal. However, providing a list of recent updates or improvements can be helpful. The appraisal is completed independently and reflects market conditions as of the effective date of the report.
Local Market Knowledge
Appraisals throughout Michigan’s Upper Peninsula require an understanding of local market conditions, including rural properties, waterfront influences, and varying property types