A Beginner's Guide to Home Inspection and Appraisal

What is a home appraisal? Is it the same thing as a home inspection? Is an appraisal nothing more than some part timer's opinion on the worth of your home? Is there anything I can or should do to prepare for an appraisal? What are you asking me for, I write about movies and politics and philosophy and stuff!

Just kidding. If you want answers to those questions and many more-well, a few more-then consider this article the music of information about appraisals and play on. Simply put, a home appraisal is a judgment of the value of a property. But far from being just some guy's opinion, this judgment is arrived at following a sophisticated process of analytical comparison. An appraisal is arrived at through analysis of neutral data which the appraiser delivers in a formal report that provides an expert, objective judgment of market value. Typically, an appraiser arrives as this judgment by use of one or more of three unique techniques. The Cost Method considers the estimated replacement costs of improvements, minus such other factors as material deterioration, and then adds in the value of the property. The Sales Comparison Method makes a comparison to similar properties in close proximity that have recently been sold. Typically this method is the most accurate for assessing a residential property's actual value. The Income Method is used for those properties that produce income. This approach speculates what the investor would be willing to pay based on the amount of income the property produces.