Home appraisals: Examining the basics

by Lena and Rich Benenati 11/03/2024

Appraisals are done often in real estate and are a vital part of determining property value. Knowing the basics can be beneficial no matter what stage of property ownership you fall into. 


How does an appraisal work?

An appraisal is done by a licensed professional to thoroughly examine a property to figure out its value. During the appraisal process, the appraiser inspects the structural quality, comparable local homes for sale on the market, checks for safety hazards and more to determine the property value.


What fails a home appraisal?

If an appraisal comes back low, do not fret, as there are several options to fix the issue. First, it’s vital to determine the cause of the low appraised value. This may include figuring out if recent data was used in relation to the local comparable properties, if repairs need to be done or if market conditions are at play. 

Things such as a hot real estate market can put a strain on local appraisers, so sometimes in these conditions the job is rushed - not giving an accurate estimate. 


What are the three types of appraisals?

There are three main appraisal approaches used in the world of real estate. These methods include: 


  • Cost approach: The cost a buyer would pay for a property should be equivalent to the cost of building a similar structure. 
  • Sales comparison: Property value is determined by comparing similar local properties in a similar real estate market. 
  • Income approach: Investors estimate the income a property could potentially bring in to see if it’s worth funding. 

If you feel like an appraisal is incorrect, it’s best to do research on the local market and work closely with an appraiser for the best results.


About the Author
Author

Lena and Rich Benenati

Lena and I have been helping our clients buy and sell real estate since 2002, marking over 26 years of combined market experience! We will earn your trust by utilizing proven marketing strategies, certified professional negotiating skills, and targeted technology. Add to this our local market insight and consistent follow up, and it adds up to a great experience for you! A family owned and operated business, we strive to be your trusted adviser, helping you navigate the home buying and selling processes. It is our mission to combine our extensive experience and superior customer service together with a positive attitude to ensure that you enjoy your buying or selling experience. Our customer service extends beyond the sale, providing you with useful information regularly and connecting you with the resources you need, when you need them. This is why an exceptionally high 80% of our business is referred to us by our past clients. We look forward to exceeding your expectations, in English or Spanish as you desire. Lena & Rich, a team you can trust, for everything real estate.