What is a real estate appraisal?

A real estate appraisal is an unbiased, professional evaluation of a property's market value based on its condition, location, and recent sales of comparable properties. Certified appraisers conduct appraisals for various purposes, including home sales, refinancing, estate planning, asset management, and tax assessments.

Why do I need a real estate appraisal?

A real estate appraisal is essential for determining a property’s fair market value, ensuring fair transactions, and meeting lender requirements. It’s often required for mortgage approvals, estate settlements, divorce proceedings, tax assessments, and investment decisions.

What is the difference between an appraisal and a home inspection?

An appraisal determines the property’s market value, while a home inspection assesses the property's condition, identifying potential repairs or safety issues for buyers.

An appraiser assesses factors such as a property’s size, location, condition, comparable sales, and market trends. For commercial properties, factors such as income, expenses, and occupancy are taken into account. The goal is to establish an objective and credible valuation.

A home inspection, on the other hand, focuses on the physical condition of the property. A home inspector examines the structure, electrical systems, plumbing, HVAC, roof, and other key components to identify potential issues or needed repairs. While an inspection helps buyers understand a home's condition before purchasing, it does not determine the home's value.

The appraisal process does typically involve an on-site visit (often referred to as an “inspection”), however it is much quicker and less involved than a home inspector’s visit. The appraiser observes the property’s condition and layout, taking photos and measurements, but does not perform extensive testing of building components.

How does the appraisal process work?

The appraiser will typically visit the property and photograph the interior and exterior of the property, while taking any necessary measurements. The appraiser asks the property contact about the property’s history, including any significant updates or renovations. For commercial properties, documents such as leases, operating statements, and building plans are requested. After the visit, the appraiser performs research and analysis to produce an opinion of value, and delivers the final report to the client.

How is my property’s value determined?

The three methods of real estate appraisal are:

• The Sales Comparison Approach (comparing the subject property to recent sales of similar properties)

• The Cost Approach (adding up the cost of building components and subtracting depreciation)

• The Income Approach (valuing the anticipated income stream from an investment property)

Additional factors that can impact value are:

• Property condition and improvements

• Location and neighborhood trends

• Market conditions and demand

• Lot size and square footage

How long does a home appraisal take?

The on-site inspection for a residential appraisal typically takes 30 minutes to an hour, depending on the property's size and complexity. The full appraisal report is usually completed within a week. For commercial appraisals, the on-site visit can take slightly longer, and the report is typically delivered within a few weeks.

How much does a real estate appraisal cost?

Appraisal fees vary based on property type, location, and complexity. Our standard residential appraisal fees range from $600 to $800, and our commercial appraisal fees typically range from $3,500 to $4,000. We will apply a discount if multiple properties are being appraised. Contact us for a free quote specific to your property.

What factors influence the value of a commercial property?

Key factors include:

• Rental income and lease agreements

• Operating expenses

• Occupancy rates

• Market demand and economic trends

• Location and zoning regulations

• Property condition and age

Do lenders require commercial appraisals?

Yes, most lenders require a commercial real estate appraisal before approving loans for purchases, refinancing, or development projects.

Do you provide appraisals for estate settlements and divorces?

Yes, we offer estate, probate, and divorce appraisals to determine property value for legal and financial proceedings. Our certified reports meet court and IRS requirements.

Can I hire my own appraiser for a mortgage loan?

Lenders require an appraisal from an approved appraiser within their network. However, you can hire a private appraiser for personal knowledge, pre-listing valuation, or dispute resolution.

How is a commercial property appraisal different from a residential appraisal?

Commercial appraisals are more complex than residential appraisals. They typically use income-based valuation methods (such as the income capitalization approach), whereas residential appraisals primarily rely on comparable sales. Commercial properties also require detailed market analysis and operating expense evaluations.

Can an appraisal help me remove Private Mortgage Insurance (PMI)?

Yes. A new home appraisal can help you remove Private Mortgage Insurance (PMI) if your property's value has increased enough to lower your loan-to-value (LTV) ratio below 80%. If the appraisal shows that you have at least 20% equity in your home, you can request PMI cancellation with your lender. Many homeowners order an appraisal after making significant improvements or when property values rise to eliminate this extra monthly cost.