How Do Appraisers Estimate The Value Of A Home?

Most people are familiar with the term appraisal. In its essence an appraisal is a valuation of your property, carried out by a qualified and experienced individual, who is known as an appraiser.

Appraisals can be carried out for an number of reasons, but normally they are performed at the request of a buyer who is seeking to secure a loan from a bank or loan company, to purchase the property. All banks and loan companies require a certified valuation of a property before they can process a loan application.

Deciding The Value

To arrive at their valuation the appraiser will use a multitude of methods that are available to them. These methods include some of the following items:

Home's size and square footage

The size (height, width, depth i.e. volume) and the square footage of the house are important considerations. The larger the house, the more it is worth, however size and value are not directly proportional to one another.

Condition of the home

The condition of the home is important, as a house that is run down on the outside and inside will not produce a large value. The entire house is assessed, including the water systems, electrical systems and any other items. The appraiser, during the valuation, will note all faults and repairs that need carrying out.

Neighborhood environment

Where your property is situated is important. No one want to live in a run down area of a city or town, or one filled with crime. Because of this, unfortunately houses that are in poor neighborhoods have reduced values, compared to similar houses in better neighborhoods.

Comparable local sales

Comparable sales of houses in the area, i.e. ones similar in size and look to your own, can provide an accurate guide to the market value of your own property. This can influence the overall price that the appraiser sets to your property.

Relevant historical information

Should your house have undergone any renovations or repairs these will influence the appraisers decision on the overall value of your house.

Sales performance and indices that forecast future value

These items help give the appraiser a clearer picture of the market environment and help them to give an accurate valuation of your property, so that it will sell for the right price, at the right time.

Location proximity to desirable schools and services

A person who wishes to buy a property that has children will want it to be as close to a good school as possible. The appraiser will look at the location of your property and decide how the local schools and infrastructure affect your property valuation.


The appraisers own experience can play a huge factor in the final valuation of your property. Their track record and knowledge of the industry is vital to coming to the right price for your home to list at.