Frequently Asked Questions

  • The method of creating an appraisal consists of an investigation which forms an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate.

    1. Cost Approach: How much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value?

    2. Sales Comparison Approach: This involves making a comparable analysis to other similar properties within a close proximity which have recently sold. This is the most common approach, and is considered the most accurate accurate and best indicator of value for a house.

    3. The Income Approach: This approach is mainly used for determining the cost of income-producing properties based on what an investor would pay based on the amount of income a property produce.

    To learn more, please visit
    What is an Appraisal?

    To learn more about the approaches to value, please visit Approaches to Value.
  • A key party in discerning the value of a house, an appraiser makes an unbiased and professional opinion on the worth of a property used in a real estate sale. Appraisers show their formal analysis in appraisal reports.

  • A home is often the single, largest financial asset anybody owns. Knowing its true value means you can the right financial decisions. There are a lot of reasons to get an appraisal from Appraisals By Michael:

    • If you are applying for a loan.
    • If you would like to lower your property tax obligations.
    • To show the replacement cost of Primary Mortgage Insurance.
    • To challenge high property taxes.
    • To deal with an estate.
    • To give you a leg-up when purchasing real estate.
    • To determine a reasonable price when selling real estate.
    • To defend your rights in a condemnation case.
    • Government agencies such as the IRS need an appraisal on every property.
    • If you are a defendant in a lawsuit.

    The difference between a home inspector and appraisers is that inspectors do not produce an opinion of value. An inspection is a third-party evaluation of the livable structure and mechanical systems of a house. Generally, a home inspection report will evaluate the amenities and the requirements of the house. 

    To learn more about the difference between an appraisal and a home inspection, please visit Appraisals vs. Home Inspections.
  • Simply put, they share nothing in common. The CMA utilizes market trends to generate most of their business. The appraisal depends on similar definite comparable sales. Also, the appraisal verifies other factors like condition, location and building prices. The CMA will provide a non-specific figure. Being a documented and containing a carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

    However, the biggest difference is the person creating the report. A CMA is created by a real estate agent who may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home. 

    For more information, please visit CMA vs. Home Appraisal.
  • Each report must reflect a credible estimate of value and must identify the following:

    • The client and other intended users.
    • The intended use of the report.
    • The purpose of the assignment.
    • The type of value reported and the definition of the value reported.
    • The effective date of the appraiser's opinions and conclusions.
    • Relevant property characteristics, including location attributes, physical attributes, legal attributes, economic attributes, the real property interest valued, and Non real estate items included in the appraisal, such as personal property, including trade fixtures and intangible items.
    • All known: easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
    • Division of interest, such as fractional interest, physical segment and partial holding.
    • The scope of work used to complete the assignment.

    In most real estate transactions, the appraisal is ordered by the lender. While the home buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The home buyer is entitled to a copy of the report - it's usually included with all of the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

    The exception to this rule is when a home owner engages an appraiser directly. In these cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

    For information on how to read the report, please visit Reading an Inspection Report.
  • In communicating an appraisal report, each appraiser must ensure the following:

    • That the information analysis utilized in the appraisal was appropriate.
    • That significant errors of omission or commission were not committed individually or collectively.
    • That appraisal services were not rendered in a careless or negligent manner.
    • That a credible, supportable appraisal report was communicated.


    Most states require that real estate appraisers are state licensed or certified. The state licensed or certified appraiser is trained to render an unbiased opinion based upon extensive education and experience requirements. To become licensed or certified, appraisers must fulfill rigorous education and experience requirements. In addition, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
  • Gathering data is one of the primary roles of an appraiser. Data can be divided into specific and general. Specific data is gathered from the home itself. Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

    General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. And most importantly, the appraiser gathers general data from his or her past experiences in creating appraisals for other properties in the same market.

  • Neither a property owner nor an appraiser can control the real estate market. However, there are steps you can take before your appraisal to increase your chances of a higher appraisal:

    • Remove clutter from countertops and floors
    • Clean your home
    • Correct easily fixable problems
    • Improve your curb appeal
    • Research the norms in your area for homes in your price range
    • Make updates and home improvements
    • Prepare a list with any recent updates to the home
    • Hire an experienced appraiser, such as Appraisals By Michael

    For more information, please visit Preparing for an Appraisal.

  • Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses in order to keep the license current.

    For more information, please visit Becoming a Real Estate Appraiser.
  • The first step in most appraisals is the home inspection. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house. Trim any bushes and move any items that would make it difficult to measure the structure. On the inside, make sure that the appraiser can easily access items like furnaces and water heaters.

    The following Items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

    • A survey of the house and property.
    • A deed or title report showing the legal description.
    • A recent tax bill.
    • A list of personal property to be sold with the house if applicable.
    • A copy of the original plans.


    For more more information and tips, please visit Preparing for an Appraisal.
    For a handy checklist, please visit To-Do List for an Appraisal.
    For questions to ask your appraiser, please visit Questions for the Appraiser.
  • Market value or fair market value is the most probable price that a property will sell for in a competitive and open market. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

  • Market value is a theoretical notion of what a knowledgeable buyer would pay a willing seller in a normal market. Sale price is a historical fact from a particular transaction which may or may not reflect the conditions of a normal market.

General Questions?

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