The appraisal process

Let us ease your mind about how an appraisal is completed.

The appraisal process begins with the inspection:

  • We measure the home on the outside to obtain accurate gross living area
  • We draw a rough sketch of the home for accurate room count
  • We take notice of the overall condition of the home
    • Note amenities, such as decks, fireplaces, porches, etc.
    • Note obvious defects and/or differed maintenance
    • Note updates and/or new additions

Once the inspection is complete, there are three types of approaches the appraiser may use to determine market value:

  1. The Cost Approach
    • How much would the subject cost to build if it were reproduced?
      • We use a national standardized book by Marshall & Swift and professional experience to determine this
    • If the home is a newer home, this approach may be applicable and is typically used to support market value determined by the sales comparison approach
    • If the home is an older home that has not has not been updated from the bottom up, this approach is generally not applicable
  2. The Sales Comparison Approach
    • This approach is used most often because it gives us the best idea of what a home would typically sell for on today‚Äôs market
    • We “compare” at least three houses/properties that are most like the subject (focusing on size, location, and condition)
      • No two houses/properties are exactly alike, therefore we use formulas to make adjustments appropriate for the differences
      • We generally use comparables that have sold within the past twelve months for a more accurate market value
    • This approach tends to be the most reliable approach when determining market value
  3. The Income Approach
    • This approach is used for rental property, both single family and multi family
    • This approach is generally not used alone, but it is typically used to support the value determined by the sales comparison approach

Once all the approaches are considered, the appraiser uses only the most applicable and reliable approaches to establish a market value for the home/property.

Appraisal Process
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N3091 Park Avenue
Iron Mountain, MI 49801