Process | Gulf to Bay Appraisals

Insurance Appraisal Process – A Policyholder’s Best Chance to Resolve an Insurance Claim Dispute!

Many homeowners and business owners find themselves disagreeing with their insurance company’s analysis of their insurance claim. However, most are unaware that they can dispute the insurance company’s findings via the insurance appraisal process! Even though the policyholder (you) submits a contractor’s estimate, receipts for repairs or materials, or even photos showing damages that the insurance company did not include for repairs… they still won’t budge.

Most policyholders are unaware of how to dispute and resolve their claim with the insurance company. Policyholders have a choice and a voice within their policy for this very purpose. It’s called The Appraisal Clause – also know as The Appraisal Provision. Now, don’t let this scare you. It may seem like a fancy clause that would take a law degree to understand. However, a simple way to understand it is that it’s the insurance industry’s version of arbitration. Although similar, the Appraisal Process is NOT an arbitration or mediation and the umpire is not an arbitrator, mediator, or judge. Insurance Appraisal, Mediation, and Arbitration are separate things.

In short; Arbitration requires attorneys and a legal process, where Insurance Appraisal does not require attorneys or a legal process. Arbitration is a dispute between two parties for any reason, where as, the Insurance Appraisal Process is a dispute between the “value or cost,” to repair or replace property only – bee it an automobile, plane, train, couch, house, commercial building, etc.

Most Policies Have the Appraisal Clause

If you feel you’re at a dead end with your insurance company and want to resolve your claim you’ll need to check your policy for the Appraisal Clause. Most policies will have the provision listed under the “What to do after a loss,” section or the “Conditions” section of the policy. Below, you will find a sample of a typical Insurance Appraisal Clause included in most policies. Keep in mind that policies can be different in each state. Therefore, you should read your own policy to see if this clause exists. It will say something similar to the following ;

”APPRAISAL – If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser. Each shall notify the other of the appraiser’s identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss.” OK, But How Does the Insurance Appraisal Process Work?

The Appraisal Process allows the policyholder (you) to hire an independent appraiser to determine the value of their damages. In turn, the insurance company will also hire their own independent appraiser. The two appraisers will then get together and select an umpire. The umpire is basically the arbitrator, or what you might call the judge. If a disagreement between the two appraisers arises, they can present their differences to the umpire who will make a ruling.

OK; so far so good, the basics of the insurance appraisal process are beginning to come together. We have an independent appraiser for the policyholder. We have an independent appraiser for the insurance company. Finally, there is an Umpire. These three individuals are known as The Appraisal Panel. The object of the Appraisal Panel is to set or determine The Amount of Loss. The Amount of Loss is the total dollar amount needed to return the damaged property back to its original condition, either by repair or replacement.

Once the Appraisal Panel is set, the policyholder’s chosen appraiser and the insurance company’s chosen appraiser will review the documents, estimates, and differences between them. The two independent appraisers will try to discuss and resolve the differences in damage and in cost. For example; the insurance company may determine that brick on a home does not need to be replaced. Where as, the contractor or appraiser for the policyholder says that it does have to be replaced. The two appraisers will discuss their reasons for their position and try to come to an agreement, first if it should be repaired or replaced, and secondly the cost to return the brick back to it’s original condition prior to the loss.

One benefit of the Insurance Appraisal Process is that the two independent appraisers have not been subject to the bickering and anger between the policyholder and the insurance company. Basically, it’s the hope that cooler heads will prevail. All the appraisers really have is the amount of the damage and the difference between the two estimate numbers. They do not have the previous baggage or anger that led up to the Appraisal. The process was designed so that these two individuals, who have no interest in the outcome, could discuss a settlement based on the facts presented to them.

Sometimes issues arrive where the two independent appraisers can’t agree on certain items. In this event, the two appraisers will submit their differences to the chosen umpire. The three will discuss the issues and try to reach an agreed settlement of the differences. As stated above; the settlement or final number is called The Amount of Loss. The final amount is known as the Appraisal Award. The Award is signed by the individuals who agree on The Amount of Loss. However, only TWO of the three individuals need to agree. (An agreement between the two independent appraisers, or the umpire and either appraiser) Once any TWO of the three individuals on the Appraisal Panel sign the award… the dispute is over! The amount on the Award binding and is paid by the insurance company, to the policyholder.

Can I Use An Insurance Attorney To Dispute My Claim?

The Appraisal Clause was initiated to lower the number of lawsuits filed against insurance companies. The courts found that many lawsuits were entering the legal system where the cost to repair or replaced damaged property was being disputed. In many cases the suites were being resolved when professional engineers and contractors could address the issues. The Appraisal Process was created to get such individuals together and keep these disputes out of the courtroom. Assuming you acquired an estimate of repair to your property for $ 100,000, from a contractor or insurance claims expert. Your insurance company has created an estimate for $ 30,000. This would be a clear dispute between the amounts of damage. This type of dispute is exactly what the Appraisal Clause was developed to resolve.

The clause allows parties on both sides of the insurance policy to dispute their differences using this less costly provision. Let’s face it; the courts are filled with lawsuits. The Insurance Appraisal Process allows for the dispute to be settled out of court. Using Insurance Attorneys and lawsuits can have insurance claims tied up in court for years. The Appraisal Provision was designed to keep these disputes out of court for a less costly and timelier resolution.

Insurance Claim Attorneys will usually represent policyholders for bad faith practices. Bad Faith is a whole other issue and sometimes happens after the Appraisal Process has been completed. Bad Faith claims are for much larger suites against insurance companies when it is alleged that they did not act with good faith of the policy they sold to the policyholder. In summary; disputes between the amount of damages and repairs will follow the Appraisal Process before entering into the legal system. Many Insurance Attorneys will also advise the policyholder to engage in the Appraisal Process before any lawsuits will begin.

How Do I know if the Insurance Appraisal Process is a Good Option for My Claim?

If the Appraisal Clause is in your policy then it is always an option. However, it’s wise to point out that Appraisal is usually an option when there is a substantial difference in the amount between the two estimate totals. For example; let’s say a fire completely destroys a house and the homeowner’s personal property within it (Know as the Contents). The differences between what the insurance company wants to pay and what you wish to receive is $ 5,000. In this situation, the Appraisal Process is not the best idea. After paying the fees involved for the appraisal, you may not end up with much of the $ 5,000 being disputed.

Now, if we take the same fire that destroys the property and the dispute between the policyholder and the insurance company is $ 40,000, appraisal should be considered. The policyholder now has a chance to recover substantially more money than originally offered.

Also, the Appraisal Clause is only applicable if a dispute arises from a covered loss. If the insurance company denied the claim as something not covered then this is not a dispute on the amount to repair, but rather a dispute on coverage. For example; homeowners and business policies due not cover floods. Flood policies are purchased separately. So, if there is no coverage for the flood damages then the Appraisal Process is not an option.

Simply put, the Insurance Appraisal Process is to determine the “amount of loss,” to property only. The Appraisal Panel is not to determine coverage, policy provisions, deductibles, how much was previously paid on the claim, etc. Let’s say there was an appraisal for a grand piano that fell off a delivery truck on the highway. The Appraisal Panel’s job is not to determine who’s at fault, the policy coverage limit, if the truck had a registration, or anything other than “How Much is the Piano Worth.”

As with our example earlier, if the insurance company offers a settlement of $ 10,000 to repair a roof and the policyholder has contractor bids for $ 15,000, then the Appraisal Process may not be the best option. The Appraisal Process may cost more than the $ 5,000 that’s being disputed. Unfortunately, the differences in repair/replacement costs are usually much greater. When an insurance company generates an estimate for a claim of $ 75,000 and the policyholder has acquired professional bids several contractors of $ 200,000 or more, its time to invoke the appraisal clause.

Beginning The Appraisal Process

Either party associated with the policy can invoke the Appraisal Process. However, such a request must be made in writing. Each policy will have a time limit of when this can take place. Even if a claim has been closed for many years, either party can still dispute the claim and reopen for review. It’s recommended that the request to invoke appraisal be sent via certified mail. Once the request to invoke the Appraisal Clause has been initiated, as explained earlier, each party, the insurance company and policyholder, appoints an Independent Appraiser. (If you wish to invoke the appraisal clause in your policy you need to submit a letter to your insurance company. Find more information at http://www.insurance-appraisal-services.com/invoke-appraisal.html )

Choosing An Independent Appraiser

It’s important to select an Independent Appraiser that has experience with the damages being disputed in the claim. A person with expert knowledge of insurance claims handling and firsthand knowledge of the damaged property and its replacement cost. For example; a person with expert knowledge of insurance claims handling and with expert knowledge of the Appraisal Process, with little experience on the costs to replace an antique grand piano may not be the best choice. In the case of a home or building fire; a good Appraiser is someone who can generate their own line-item detailed estimate to repair or replace the damaged property, can secure multiple bids from reputable contractors to back up their findings, knows building codes, and can articulate unforeseen costs of repairs. If a building has historic features with materials like, solid Adler doors, large detailed moldings, and custom cabinets, a great amount of research with a salvager may be needed. The Appraiser should have experience with building procedures, materials and the cost of such terms to create an accurate “amount of loss,” to return the property to the same condition it was prior to the loss. See, the policy provides coverage to replace the damaged property with those of like kind and quality. An Independent Appraiser that is not familiar with, or that does not have experienced contractors, engineers, and other experts to consult with about mold, demolition, cost associated with contents, and in some cases, additional living expenses, does not sound like a good candidate. You should choose your Independent Appraiser wisely. Look and interview someone with experience of the type of damage you have and with the type of property damaged, as well as a specialist when it comes to the Insurance Appraisal Process and also Insurance Claims Handling.

Many people confuse the words Independent Appraiser with that of a real estate appraiser. As you can see, a real estate appraiser is far from what is needed for an Insurance Appraisal. An Independent “Insurance,” Appraiser is an insurance claims expert on costs and processes to repair or replace damaged property. The next question is, “Who will have such knowledge?” People requesting assistance in the past have asked if the following experts with the following backgrounds are good choices ;

Structural Engineers: This person may be a structural expert and could probably provide a good estimate to replace a building, but what about the contents (furniture, food, etc.) damage? Do they know anything about the insurance policy, the claims process, the software used by insurance companies, the Appraisal Process?

Construction Attorney: A Construction Attorney most likely has knowledge of construction contracts and issues that building contractors have. Do they know anything about the insurance policy, the claims process, the software used by insurance companies, the Appraisal Process, the contents damaged? (NOTE: If you retain an attorney as Appraiser, remember, there is NO attorney/client privilege because the attorney is being hired as an Appraiser, not as an attorney.)

Construction Superintendent or General Contractor: Again, excellent choice for generating a structural estimate, but is most likely not familiar with insurance claims… and even more importantly, the Insurance Appraisal Process.

Insurance Claim Attorney / Lawyer: Keep in mind that the process was designed to keep these types of disputes out of court. You can surely use an attorney as your appraiser; however, the fees can exhaust your reward. Attorney’s fees range between 30% and 40% of the amount collected. This will dig deep into the net amount you receive. An Insurance Attorney will also have expert knowledge of the policy. However, the Appraisal Provision clearly notes that no policy provisions will apply. Has the attorney represented their clients in many appraisals or mostly in court cases? How familiar are they with the Appraisal Process, building costs, construction practices, the contents damaged? Does the attorney know anything about the software used by insurance companies? (NOTE: If you retain an attorney as Appraiser, remember, there is NO attorney/client privilege because the attorney is being hired as an Appraiser, not as an attorney.)

Independent Insurance Appraiser: Doesn’t it make sense to hire an individual who is an expert of the process in which you are about to engage? You’ve heard the expression, “Would you go to your auto mechanic if you needed brain surgery?” It is highly recommended to use a qualified, professional, Insurance Appraiser. This professional will already know the Insurance Appraisal Process. They will also have qualified professionals (engineers, contractors, inspectors, etc.) at there disposal to back up their analysis.

Regardless of background, an Independent Appraiser will also require good communication skills and agree with the position they are defending. They should know about the insurance policy, the claims process, the software used by insurance companies, the Appraisal Process, contents damage, structural damages, building costs and processes, as well as materials and building codes. Makes sense, right?

Advantages to the Insurance Appraisal Process

There are several advantages to the Insurance Appraisal Process. The most obvious is costs. Insurance Attorney’s will usually charge 30% to 45% of the total award. On a $ 200,000 claim, the attorney’s fee would be in the range of Sixty to Ninety-thousand dollars ($ 60,000 to $ 90,000). That can hurt a policyholder trying to rebuild their life. Remember, the Insurance Appraisal Process was designed to keep these disputes out of the courtroom.

The advantage of invoking appraisal allows for a less formal or non-legal proceeding. An Independent Appraiser usually charges in the range of $ 125 to $ 200 per hour. Using the same example above with an award of $ 200,000; if the dispute took 25 to 50 hours, the cost would be in the range of Five Thousand to Ten Thousand dollars ($ 5,000 to $ 10,000). This can be a significant difference.

Another advantage is time. The courtroom can delay an insurance claim dispute for years, where the Appraisal Process usually only takes a few months. Sometimes it can last longer depending on the complexity of the claim. However, the courtroom will most certainly be longer. The result of less time and less cost becomes a less of a burden for both sides of the dispute.

Once an award is signed the insurance company has 30 to 60-days (depending on state) to settle the award.

Should I Invoke the Appraisal Clause For My Claim?

When the dispute is real and the damages are real, the policyholder usually see’s a greater return at the end of the appraisal. If the policyholder’s claim is supported by an Insurance Claims Expert, building or repair contractors, or an engineer – and the amount of money between the two estimates is large, the Appraisal Process is a no-brainer. However, if a contractor or Public Adjuster is trying to beef-up the damages for their own benefit, then it’s the policyholder that pays dearly for it. If you’re considering invoking appraisal on your claim you should consult an insurance claim expert to see if it’s worth your time and effort.

Being that the Appraisal Award is binding the policyholder should be sure before they cost themselves unwanted anguish. If the outcome of your Appraisal Award is not what was to be expected, both parties must live with the result. As stated, the Appraisal Award is binding on “both parties.”

At the end of the day nothing is risk free. There are no promises or guarantees with the outcome of any Appraisal. However, if you have a dispute over $ 20,000 you’re more than likely to have a result you can live with. Do your homework and remember to choose an Independent Appraiser that is educated and experienced with the type of damages you have, what caused the damage, and the type of property damaged. Keep in mind that this is “YOUR,” property and “YOUR,” insurance policy. Your policy protects you with the Insurance Appraisal Process, so that…

The Playing Field Remains Level, and The Process Works Fairly

For Both Parties… Not Just The Insurance Companies!

Copyright of Insurance Claims Group, Inc. & Joseph P. Brennan: Joe Brennan is President and owner/operator of Insurance Claims Group, Inc., a national independent adjusting, appraisal, and umpiring firm. Joe has been in the property loss business for more than 24-years. His loss experience began as a contractor / builder, which included water and fire damage restoration repair services. After 20-years of insurance restoration estimating and repair experience, Mr. Brennan became a licensed independent insurance claims adjuster. Joe has maintained his IICRC Certification in both Fire and Water Restoration and also maintains active adjuster licenses in 10-states. Throughout his career, he has handled many multi-million dollar losses, both commercial and residential. The amount of combined experience and knowledge of new construction, damage repairs, and insurance claims handling has advanced his ability to act as a Dispute Appraiser and Appraisal Umpire. Mr. Brennan is highly educated with the appraisal process and has acted as an appraiser and umpire on dozens of claims.

Get your Insurance Appraisal Questions Answered FREE! No cost, no obligation, I will answer your questions. Mr. Brennan can be reached at;

Insurance Claims Group, Inc.
2054 Kildaire Farm Rd., Suite # 426
Cary, NC 27518
Ph: 919-669-9111
Fx: 919-573-9595
website: http://www.insuranceclaimsgroup.com & http://www.insurance-appraisal-services.com

Copyright of Insurance Claims Group, Inc. & Joseph P. Brennan: You may freely republish this article, provided the text, author credit, the active links and this copyright notice remain intact.

Article Source:
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Appraisal is important in home buying because it tells the buyer the actual fair market value of the property. This is also the basis for loan. The bank wouldn’t just approve the loan outright. They rely on the result of the appraisal before they can make a fix value the amount of money they will release for loaning.

A professional appraiser performs the appraisal. He or she would visit the property to be bough and list its features. The property to be purchased will then be compared with other properties in the market, having the same features and were just recently sold. This is how the fair market value is determined.

A professional appraiser should have proper training for this job, licensed and experienced. They should conform to the ethical standards set by their governing body to ensure integrity while practicing.

Before, requesting for appraisal was done easily. There was no mumbo-jumbo as to the process because every lender had a list of approved appraisers. They have built good relationships with these people. As a result, lenders would just pick from the list and hire them to do the job. In this process, lenders were assured of a quality appraisal.

However, a certain event changed all that. In 2007, Attorney General Cuomo filed a case against EappraiserIT for schemingly inflating the values of the properties for Washington Mutual. This activity is in violation of the Uniform Standard of Professional Appraisal Practice (USPAP), which requires appraisers to perform their job with impartiality, objectivity and independence. The Attorney General even mentioned an email with a message from the president of EappraiserIT. He said that they should make sure appraisal results were of value to retain their position as WaMu’s appraiser. Don’t you think this is a total destruction of their impartiality, objectivity and independence? Totally, it is.

Enter of HVCC

Because of the said event, Fannie Mae and Freddie Mac adopted a new set of guidelines for appraisal. This is called the HCCC or the Home Valuation code of Conduct. It was adapted on May 1, 2009, where both leaders in financing committed themselves not to engage in any transactions with lenders who will not adapt such code. This was done mainly to improve the consistency of the practice (appraisal) to be performed with independence, impartiality and objectivity.

Mortgage Industry Affected

While the goal of HVCC is very admirable, lenders, buyers and appraisers were heavily affected by this ruling. Part of the rule is that lenders can no longer pick appraisers from their approved list. They can use in-house appraisers provided they meet certain requirements mentioned in the code like their compensation should not be dependent of the value of the appraisal. In addition, any broker or parties, who can gain from the transaction, will no longer be part of the appraisal process.

As the result, consumers may end up paying added cost for locking in rates and funding the loan. At any time the lender will be changed, they may have to pay for an additional fee for a new appraisal. Since independence of appraisal needs to be maintained, some lenders may opt to use appraisal management companies. Most Appraisers wouldn’t agree to work with them because their fee is relatively lower compared to their earnings before. This also brings the tendency offenders to end up with inexperienced lenders and may be out-of-towners. In the end, consumers and investors may suffer from a poor appraisal with undervalued properties brought by inexperienced, unfamiliar appraisers who are not even living in the same town.

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What is the HVCC about? It is essential to understand this first before we can fully grasp the effects it has on the mortgage processes. The HVCC is short for the Home Valuation Code of Conduct. This took effect last May 1, 2009. This aims to change the appraisal system of the various properties. This affects the role of the different parties involved in the real estate transaction. This came about because of the various malicious appraisals in the past, which made the buyers pay more than they should.

One of the changes is the role of requesting appraisal. The loan officer no longer has the right to order such procedure. He should not take part in the choosing of an appraiser as well. In addition, the appraiser to be chosen has to be a member of a group of appraisers. If a second appraisal is necessary, a new appraiser from a new group of appraisers has to be chosen.

The main purpose of the HVCC is to eliminate the fraudulent valuations done in the past that contributed in the problems faced by the industry today. It aims to promote honesty and integrity to the appraisers. However, many contest its ability to resolve the problem of the industry. Many think that this will only add more problems to the issues face in the real estate realm. Moreover, this has affected all parties in the real estate transaction.

Many sellers are becoming impatient with the new law. This is because of the prolonged process of the mortgage loan application. Since this takes a considerable amount of time, many sellers prefer cash arrangement. This does not favor buyer who rely on mortgage to purchase a property. Many buyers are finding it difficult to obtain a loan as well because of the added requirements. The process is stricter too, which makes it more difficult for them to qualify. Appraisers are facing problems as well. If they join a group, the rate is lower. More groups are turning to new appraisers because the experienced ones are not ready to accept such new terms.

What the HVCC wants to do is good. It wants to eradicate practices that are taking advantage of the home buyers. This is what the industry needs, an honest valuation of the properties for sale. However, for most professionals, this will give additional burden to the buyers not only because of the prolonged, stricter and more difficult mortgage process. This could also mean additional rate they need to pay.

There are several problems brought by the HVCC law. Amidst its goal to stop fraudulent valuation of properties, many are not happy about it. This is probably because of the change it has created to the old ways of the different processes involved. Most valuations of new appraisers are inaccurate and this has been expensive for most agents. It will take time before everyone can work with the newly implemented rule.

Once everyone gets use to the new process and appreciate its goal, everything will be in sync again. Adjustments have to be made now though.

Check out the real estate market and you will quickly realize you need some help in the decision to sell your home, whether you want to do it now or sometime in the future. Either way, you need to consider what a New Jersey real estate appraiser can do. New Jersey is a unique market, of course, so you will need all the help you can get in order to make the first right step in the real estate process.

An Appraiser’s Work

Appraisers most often come into the real estate transaction picture when they are hired by the lending company to come out to the home and come up with a value before there is a decision on the mortgage agreement. This is so everyone involved is aware of whether or not a good deal is about to go down. The assessment allows the bank to know if the loan they are taking out is a good investment. Also, if you disagree with an assessment or want a second opinion, you are allowed to get your own New Jersey real estate appraiser to come in and see what the value is before you decide to sell.

What an Appraiser Will Do — or You

Here’s how the actual appraisal process will work. The New Jersey real estate appraiser will come to your home and take measurements from the outside. This will give them an accurate reading of the square footage. The appraiser will not factor into the value of the home anything that is on the inside. The appraiser will come in the house to assess any renovations you may have made to the space. If those renovations aren’t obvious to see, you need to be sure to point them out to the appraiser while they are doing their appraisal.

The New Jersey real estate appraiser will take notes and fill out a standard from while in your home. After the appraiser is finished with their appraisal, they will move on to your neighborhood, checking out other homes, what they have sold for recently and how many homes have been sold within the past year. After the appraiser is finished, they will put together a researched report that they will show you so you can learn the value of your home on the current market.

What an Appraiser Can Do For A Seller

The real current market value of your home gives you many options to choose from. You can list your home for that price (or higher) and hope that buyers will take it at that. Or you could hold onto your home if it has a high value and try to cash in later. And if it turns out your home has a low value you may have to do some renovations to pump up the value to the buyers.

This article is provided by LocateAppraisers.com (http://www.locateappraisers.com), an appraisal directory site that connects lenders and appraisers. Whether you’re looking for a New Mexico real estate appraiser, a Florida real estate appraiser, or a Washington real estate appraiser, the great tools at LocateAppraisers.com include everything you’ll need to find the best appraisal professional in your area.

If you are planning to purchase a house or property, there are certain procedures in real estate industry that you have to learn before you venture into any transaction. Home appraisal means the process used in a certain transaction to secure the welfare of two parties, the seller and the buyer. Hence, before making any decision, it is best to follow the standard operating procedures to be able to achieve a successful result of your investment.

Home appraisal or commonly known as real estate appraisal or property valuation, is a process of assessing a certain property in order to identify its quality and right market value for sale. It is essential to determine what the requirements of a certified appraiser are.

People assigned to appraise or the home appraisers go through an internship and extensive coursework to be able to get the certification imposed by various states under the real estate industry. When you undergo the home buying process, valuation surveyors are considered to be third parties who do not have any financial relation with any of the parties involved in the deal. These people are well trained to perform accurate and reliable appraisal reports that how the market value of the property done based on the whole structure of the house, potential issues found on its actual condition and other important related features that the appraiser discovers in his evaluation.

However, there is a major difference between the work done by the property surveyor and home inspector. These two positions are often misunderstood by most of home buyers. Basically, home inspectors are reliable individuals who accompany you when you visit the house in order to inspect the actual condition of the property. They check areas and systems which are possibly problematic and need immediate repair. These include plumbing, electrical connection, heating and essential parts of the house such as ceiling, kitchen, roofs, attics and a lot more.

Alternatively, home appraisers cover the general issues they may find but do not tackle all the details which home inspectors do. They provide the whole market value and the expected average sales time of the property. These people also cover assessment according to the appreciative value of the property based on where it is located.

Knowing how the appraisal method works can also be beneficial to those people who are planning to buy a house. This will help them in verifying if they are given the appropriate market value by their appraiser. The two most common methods are the sales comparison approach and the cost approach. The former is done based on the idea that no two properties are completely the same. The difference in the market value usually relies on the location of the house. Thus, even if two properties are similar in its structure, the market value is still different based on the type of location. One may find it more expensive because it is situated on a place where its appreciative value is increasing while the cheaper property is located on a less desirable place.

As for the cost approach, it applies to new houses where appraisers identify the market value based on the repair costs spent. There might be damages that need immediate repairs or the structure has some problem areas that must be repaired.

Home appraisal provides you the right assessment of the whole quality and value of the property to identify if the asking price is right or if you are a possible victim of an overpricing scam.

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If youâre planning to sell a piece of real estate, it is important to get your home appraised. While you can look at market trends for houses similar to yours to generate a rough estimate of what you think your home should be worth, only a certified home appraisal will give you a number that you can be truly confident about and one you will be able to present to potential buyers.

How An Appraiser Rates Your Home

The real estate appraiser will generally start by doing an analysis of the physical characteristics of the property. How much square footage is there? How much useable square footage? How many bedrooms? How many bathrooms? How much undeveloped land is part of the property? How old is the property?

Heâll then collect sales data for similar homes that have sold in the same neighborhood. He will use these figures to gain a basic understanding of how much a property like this should be valued at in the current market.

Finally, there is a field inspection. The first part of the field inspection is the subject property inspection, which involves an exterior and interior inspection. The exterior inspection consists of taking pictures of the front and back of the home, the back and front yards and the street in front of the home. The interior inspection consists of noting the condition of the walls and fixtures within and making notes on anything that might increase or decrease the value of the property in this regard. He should draw a floor plan of the home during this part of the inspection. The second part is the exterior inspection of comparable properties, which he will use to help him estimate the final value of the property being appraised.

The Importance Of Home Appraisal

A good appraisal can make you thousands of dollars more than you might otherwise get. Be sure that the appraiser you use is highly trained and trustworthy. Try to get references from others who have used the appraiser successfully to be sure you are working with someone who will give you a true and honest accounting of your homeâs value. To make sure you get the most favorable appraisal you can, take the time to prepare for the appraiserâs arrival. Give the home a fresh coat of paint, make sure the home is clean and take care of any minor repairs before he arrives.

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