How does the appraiser determine the value of property?
There are several factors in determining the market value of property. The biggest and single most important is the use of comparable sales or “comps.” These are homes that are fairly similar to your home in size, location and amenities/upgrades. The appraiser will try to locate three comps that sold within one mile and within the last three to six months from the time of inspection. They will use these comps as a starting point and make adjustments to each sale for the differences between your property and each of the comps. They are trying to determine what the home would have sold for had it been exactly like this home. When this is completed, he/she will determine the final value estimate and turn the report over to the lender. If you are selling your home, the buyer’s lender will chose their own appraiser and you have little power in this situation, except to decide to have an appraisal done BEFORE you place your home on the market. This is perhaps the wisest thing you can do for
