Costs and Services Included in a Real Estate, Home Appraisal
The home appraisal is a process that leads to the development of an opinion of value for a home. The process typically finishes with an appraisal report that contains physical information about the home being appraised, the market in which the home is located, and how the home might compete in that market.
Home Appraisal Process
There are many different types of appraisals and their costs vary, largely based on the complexity of the home being appraised and the report or delivery method of the appraisal. An appraisal can be as brief as a single page letter of value, to a 30+ page written report. A typical appraisal includes a description of the home, a floor plan, photos of the home and comparables, maps of both, and market data exhibits that support the appraiser’s conclusions.
More on the Appraisal Process
Most typical appraisals for a bank or lending use are written on a form, the URAR or Uniform Residential Appraisal Report, being most common. The forms are different for a condominium and for a multi-family property. These reports typically follow a complete observation of the interior and exterior of the home.
Home Appraisal Cost
The typical home appraisal cost ranges from $650 for a typical subdivision type home, to over $1,500 for a complex property. Common complexities are waterfront, homes over 4,000sf in size, acreage parcels, and homes with accessory dwelling units.
Most appraisals involve the appraiser researching the subject, its age, size, style, construction quality, etc. as well as its market. The market research reveals what the highest and best use is for the subject’s site, as well as recent comparable sales, most similar to the subject.
While there are generally three approaches to value a home appraiser looks at, the sales comparison approach is the primary method of forming an opinion of value. In layman’s terms is making an apples to apples comparison.
Some appraisals are done from the appraiser’s office, relying solely on the County records and MLS information for the subject and comparable sales, this is called a desktop appraisal. There are appraisals that can be done from just an exterior observation of the home and the comparables. This is sometimes referred to as a “drive by” appraisal. Appraiser’s call this an exterior only. Both of these types are much less common than a “full appraisal” or traditional home visit and observation. The reason banks prefer the full appraisal is that it uses the most data and is the most reliable method for developing an appraiser’s opinion of value.
When someone is looking for an appraiser, for an estate, family law, or other non lending work reason it is in their best interest to hire a Certified appraiser, ideally one who is designated by the Appraisal Institute. An appraiser who knows their market and knows the right type of appraisal for their needs.