In all residential real estate appraisal reports from certified, licensed real estate appraisers like Ferstl Valuation Services, there are some important elements you’ll want to make sure are included. Here’s a helpful list to keep on hand in order to verify the residential real estate appraisal report that you receive will meet the needs of all those involved in your case.
Scope of Work and Intended Use
At the top of a report’s list for important information is, of course, the client’s identifying information and the property address. The scope of work, as well as the purpose and type of the appraisal are next.
The scope of work will detail the appraiser’s definition of an “appraisal” and is a written set of expectations that form the agreement or understanding between you and your appraiser or appraisal company. Included in the scope of work should be the process the appraiser will use to complete a full and accurate real estate appraisal. The scope of work must be clearly disclosed in the appraisal report.
In the same vein, is the appraisal’s intended use. There are a multitude of reasons to obtain a real estate appraisal, and your report should demonstrate that the appraiser understands what you will be using the report for, and in what capacity.
Approach to Value and Type of Valuation Used
A certified residential real estate appraisal should also include the type of approach the appraiser used to come to the value of your property, (i.e. Market Value, Salvage Value, Replacement Cost New, etc.) along with the type of valuation used. For each type of valuation there should be a clear discussion as to why it’s applicable to the particular real estate appraisal situation too. This way you’ll understand more about how the appraiser arrived at the final monetary value of your property.
Description of Property Appraised
All residential or commercial real estate appraisals will contain a detailed description of the property being appraised. Items like property boundaries, exterior and interior building features, highlights of the property, and other items that can be used to distinguish the property being appraised over others should be included in this section. General data on the market area and specific data on the subject and comprable properties should also be included. It is also not unusual to see photographs or blueprints to aid in describing the property.
Support for Valuation Conclusions and Relevant Dates
The real estate appraiser should also document support for the valuation produced within the real estate appraisal. For residential real estate appraisals, this is generally done with the comparables or “comps” as mentioned in the “description” paragraph above. Comparables in this case include other residential properties that are similar to yours that have recently sold and their selling price. They won’t be exactly the same of course, but, they should be of similar lot size, neighborhood type, and building square footage.
The Appraisal Institute provides comprehensive and detailed documentation on understanding appraisals.
Relevant dates that a residential appraisal might contain include inspection dates, date the building was constructed, dates of additions or other major changes to the property, the effective date of the valuation, and other important dates like these. These relevant dates serve to provide additional information about the property itself as well as the process moving forward.
Qualifications of Appraiser
In addition to all of the information about the property being appraised, you should also receive documentation in the report that supports the qualifications of the appraiser if you haven’t previously obtained this information. This will come in the form of a curriculum vitae and/or a statement of professional qualifications. Many real estate appraisers will also provide references upon request.
Within a certified real estate appraisal the appraiser should also sign and certify that the work is true and correct, that there is no bias on his or her part, that they did in fact go on-site as part of their appraisal process, and that the appraiser is solely responsible for the information contained within the report. The appraiser and any other interested parties will sign the report to verify that all parties are in full agreement and understanding of the contents and limitations of the report produced.
All Ferstl Valuation Services appraisers are certified in Arkansas, as well as several surrounding states in the region. Our trusted residential appraisal reports have been relied on for over 45 years. If you would like more information on the residential appraisals offered by our team, please call us at (501) 313.0641 or contact us online. You can also request a residential property appraisal online to get started now.