Appraisal Basics
How Residential Appraisals Work
By Carlos E. Larocca, Certified Residential Appraiser (Cert Res RD6469)6 min read
A residential appraisal moves through five steps: the assignment is defined, the property is inspected and measured, comparable sales are verified and adjusted, the approaches to value are reconciled, and a written report is delivered. Most residential assignments finish in two to three business days after inspection.
Step 1 — Defining the assignment
Before any data is gathered, the appraiser and client agree on intended use, intended user, effective date, and scope of work. A report prepared for a probate filing is not interchangeable with one prepared for a lender, because the intended user and effective date differ.
Step 2 — Inspection and measurement
The appraiser observes the property, photographs each room and the exterior, and measures the improvements to calculate gross living area under ANSI standards. Condition, quality of construction, functional layout, and any deferred maintenance are recorded.
Step 3 — Comparable sales research
Recent closed sales of similar properties are identified, then verified through MLS, public records, and where necessary the brokers involved. Active listings and pending contracts show where the market is heading, which matters in a moving market.
- Prefer sales within the same neighborhood, subdivision, or condominium line
- Prefer sales closed within the last three to six months
- Exclude distressed and non-arm's-length transactions unless they define the market
Step 4 — Adjustments and reconciliation
Each comparable is adjusted for differences in location, site, size, age, condition, quality, and amenities. The adjusted values are then reconciled — not averaged — with the most similar sales carrying the most weight.
Step 5 — Report delivery
The written report states the value conclusion, the data behind it, the scope of work performed, and the appraiser's certification. A workfile documenting every source is retained for at least five years under USPAP.
Frequently asked questions
- How long does the appraisal inspection take?
- Typically 30 to 60 minutes for a condominium or average single-family home, and 90 minutes or more for larger, waterfront, or unusual properties.
- Does the homeowner need to be present?
- Someone must provide access, but it does not have to be the owner. An agent, tenant, or lockbox arrangement works as long as every room is accessible.