Appraising a Home

• Residential real estate appraisers inspect homes inside and out. They review title documents and property surveys for determining lot lines and measurements. Inspecting everything from attic to basement and outbuildings, including workshops and garages, provides appraisers with the information needed to determine a property's overall condition. Appraisers test lights, electrical connections, appliances and check wiring and plumbing. They note structural problems and potential environmental and safety hazards. Appraisers also document and recommend repairs required for complying with local building codes and for meeting mortgage lending requirements.
  
  

Grounds and Landscaping

• Appraisers also evaluate the land surrounding a home. They'll note features, such as decks, balconies, covered patios, outdoor living areas, and built-in amenities including spas, pools, fountains and grills. The condition of lawns, gardens and yards impacts overall exterior appeal, as potential buyers are drawn in by a home's "curb appeal." A showpiece home with a messy exterior can be undervalued. Homes may be overvalued if they are too large for their neighborhoods or if the appraiser fails to identify features detracting from a home's appeal. Examples of negative features include commercial or industrial zoning nearby, high noise levels, high crime areas or areas with known environmental problems.
  
  

Location, Location, Location

• Appraisers consider a home's location for establishing its value and determining its desirability. How much a property and its neighborhood appeal to prospective buyers impacts its value. Homes on corner lots or next to open spaces may be valued higher than homes with neighbors on all sides and fronting a busy street. Appraisers research and compare recent sales of comparable home listings and recent home sales near the subject home. Selecting inappropriate homes for comparison, or "comps," can cause a faulty appraisal by incorrectly influencing the appraiser's valuation of the subject home.
  
  

Avoiding Faulty Appraisals

• Appraisers allowing personal beliefs, preconceptions or opinions to influence their work can cause faulty appraisals. Appraisers are expected to perform appraisals in a professional and objective manner. Their assessments of home values are documented with photographs, drawings and narrative comments about their inspection of a subject home. Appraisers employed by mortgage companies may be more flexible as they want their companies to make mortgage loans. Over-valuing a home for the purposes of gaining mortgage approval is fraudulent and unethical. Appraisers intentionally falsifying appraisals risk prosecution, lawsuits and/or losing professional licensing.