The Appraisal Process

Appraisals: How Are They Done & Who Needs Them

Posted by TSI Appraisal

The appraisal process can be a little confusing for buyers and companies alike. There is a great deal of research, data gathering and analysis that goes in to every appraisal report and it’s easy to get lost. To help steer you into the right direction, here are a few basic things that everyone should know about the appraisal process. Below are some frequently asked questions about real estate appraisers.

What does an appraiser do?

Appraisers provide objective, impartial and unbiased opinions about the value of properties. They assemble a series of facts, statistics and other information regarding specific properties and then analyze this data and develop their opinion of value.

Appraisers are challenged to give their unbiased opinion of value by looking at all of the variables. This can be difficult because every property is unique and comes with its own specific set of variables.

In addition to these variables, the appraiser is bound by Uniform Standard Professional Appraisal Practices (USPAP) guidelines, state regulations, and lender regulations that dictate what they can and must put into the appraisal report.

There are a lot of different types of appraisers. There are jewelry appraisers, art appraisers … basically there are appraisers for nearly every industry wherever an item or property’s value is can be debated.

Who needs an appraisal?

An appraisal report is ordered by the lender, but is also used by other parties in purchase process for informational purposes; this includes the borrower, title insurance company and the county.

When you purchase a home, it is important to have the property appraised, because it’s probably the largest purchase a person makes in their lifetime. You don’t want to pay $250,000 for a house and come to find out that is only worth $180,000 when you try to sell it, do you?

Also, an appraised value is important to the company lending you the money to purchase the house. They want to ensure that they are giving you the proper amount of financing for the property. Lastly, it is important to the title insurance company as the premium the customer pays is directly correlated with the appraised value of the property.