The appraisal process can seem confusing to the average homeowner, but it needn't be. Appraisers follow a set of federally accepted guidelines and practices, known as USPAP, which govern the ethical and legal aspects of the appraisal reporting process. For the homeowner, however, generally the most important aspect of the appraisal is learning the estimated value of their home and understanding how that conclusion was reached.

To properly do an appraisal, the appraiser needs the most accurate information you can provide about your home. This information includes but is not limited to: bed/bath count, square footage of the house (not including the garage), the home's approximate age, type of heating/cooling, any remodel or addition work and any special amenities (like a pool). This information allows an appraiser to more accurately research available market data sources prior to seeing your home.

When the appraiser arrives at your home to do the "inspection", the appraiser is interested in the types of materials used in the construction of your home (roof type, window type, central heat/air or wall heat, formica or tile?). The appraiser is not int erested in whether or not you have dusted that day or if you are in the middle of folding the laundry: housekeeping is not the issue. However, a clean home can indicate a well cared for home. So maintenance of the home is of primary interest: are the walls/flooring/floor coverings in good shape?; are the built-in appliances in good working order?; etc.

Once the inspection is completed, the appraiser will compare your home to recent sales in your neighborhood. These sales are called comparables. Ideally, the appraiser would like to find a home exactly like yours right next door to yours. However, this rarely happens. The appraiser will compare your home to homes that are as similar as possible. Similarities include but are not limited to: square footage, bed/bath count, age, appeal, condition, quality of materials used in construction and ameni ties. Where differences occur, the appraiser makes adjustments. These adjustments are based on the appraisers experience with and knowledge of the market and what value the typical buyer would place on a given amenity. After the adjustments are m ade, the comparables will indicate a value range. This value range is then narrowed to the Final Estimate of Value based on market trends (are sales prices in the area stable, rising or falling?) and whether your home compares more closely to homes at the upper, lower or middle of the range.

The appraiser has also estimated the Cost to Construct your home, on your lot using the same materials as are present in your home. This Cost to Construct is based on residential cost handbooks and the appraiser's knowledge of local building cod es and labor rates. The Cost to Construct ideally should fall within the value range indicated by neighborhood sales.

After the appraisal is completed, it is submitted to the Client. The client can be a person or institution. By law, the appraiser can discuss the particulars and outcome of the appraisal with the client only. If the appraisal was ordered by you r bank/mortgage company then they are the client and "own" the appraisal. Under most consumer laws (check with your state for specifics), if you pay for the appraisal, you are entitled to a copy of the appraisal but must go through the loan officer at yo ur bank/mortgage company. (Your loan officer can inform you as to any specific requirements your bank/ mortgage company may have). Any questions you have regarding the appraisal itself may be directed to your loan officer who will, in turn, contact the appraiser if further clarification is required.

The appraiser follows federal guidelines and uses knowledge based on continuing classroom education and experience in the field to arrive at a logical conclusion regarding the value of your home. We hope this brief overview has answered your questions about the appraisal process and the way in which the Final Estimate of Value is determined. However, if you have any unanswered questions, you may direct them to your loan officer or e-mail us.