A residential appraisal is typically done in 2 phases.
Phase 1
The first is for an appraiser to visit your home to gather the pertinent information for the report. Typically once a client has made the decision to get an appraisal, our office will contact you to schedule an appointment. The inspection usually only takes about 20 minutes, depending on the size of home, the site size and the number of outbuildings. The purpose of the inspection is to confirm everything is where it should be. Specifically we are looking at the size and age, the number of bedrooms and bathrooms, the finishing of the home and getting a better understanding of the neighborhood and surroundings. It is important to note, the appraiser is not worried about a messy bed or some dishes in the sink.
Phase 2
Once the inspection is done the appraiser will do the research and analysis phase of the process. This is where the appraiser will go back to the office and start gathering the information required to accurately establish a value. Residential appraisals are based on two primary approaches. The first of which is referred to as the cost approach. In this approach the appraiser is basically establishing what it would cost to build the house new, factoring in depreciation if necessary and then adding back in additional features including the land value, outbuildings, basement finishing, garages, etc.
The second approach is known as the comparable approach. In this approach the appraiser is taking similar properties that have recently sold in the market area and applying adjustments to the differences. Things that are considered in this approach may include the location, condition, age, style, and square footage of the property.
Additional Considerations
The appraiser will take other variables into consideration during the process including any statistical analysis that may suggest value trends in the area, previous sales history information of the subject and comparables, what is currently for sale in the subject area and if there are other factors that may influence the marketability of the home such as economic or geographical factors.
From the time of inspection the whole processes typically takes about 2 to 3 business days. It is important to note, in accordance with the Appraisal Institute of Canada, the appraisal report is only sent to the client unless the client instructs us to share the report with a third party.
