What To Look For In An Appraisal Report

You should review your home appraisal report to make sure it was done accurately. The appraisal document contains a lot of information that leads to determining the value of a home. Homeowners should take care to review the appraisal report carefully.

As appraisal specialists, we want to help you better understand  what to look for in an appraisal report. We want to help homeowners spot check the reports.

Here are the top three things to look for when reviewing your appraisal report:

1. Is the subject property reported with the correct bedrooms, baths,
garage, pool and etc?

Appropriate identification of the subject real estate property is the first thing homeowners should look for. For example, if a three-bedroom home is identified as a two-bedroom, this will inaccurately alter the determined value of a home.

2. Are the comparable sales used really comparable?

Look to see if the comparable sales are located within close proximity to the subject (Typically within one mile for suburban & urban areas) and have closed within the past three months. If you have a unique property such as water front or over sized lot the appraiser might need to find sales that are more than a mile away and have closed over three months ago.

Further, the comparable sales used in the should not have total adjustments exceeding 25% of the sales price. For example, the adjustments that are made to the comparable sales for differences in livable area, site size, condition, etc should not exceed 25%. If they do then you have to ask the question; Is this sale really comparable?

3. Is the appraised value bracketed?

Is the appraised value somewhere between the highest and lowest sale price and the highest and lowest adjusted value? When reviewing an appraisal report for a home, the appraised value should be somewhere in between the highest and lowest comparable sale prices and adjusted values.

No two properties are alike, even if they are located in similar neighborhoods. It is the responsibility of the appraiser to adjust the sale price of each comparable property. For more information on reading and understanding appraisal reports, see How to Read an Appraisal.

Categorised in: Appraisal Tutorials & Info, Blog

This post was written by Joseph Castaneda