EastPoint Appraisal FAQs

An appraisal, as defined by the Uniform Standards of Professional Appraisal Practice (USPAP) is "the act or process of developing an opinion of value". USPAP is a set of federally accepted guidelines which govern the ethical and legal aspects of the appraisal process. This opinion or estimate is arrived at through a formal process that typically uses the "three approaches to value". They are the Cost Approach (or what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value), the Sales Comparison Approach (which involves making a comparison to other similar nearby properties which have recently sold), and finally the Income Approach (which is generally used when appraising income producing properties such as multi-family residences). Of the three approaches to value, the Sales Comparison Approach, which compares your property to other similar nearby properties, is considered the most accurate and given the most emphasis.

The first step in the appraisal process is the property/home inspection. During this process. the appraiser measures the home, draws the layout of the rooms inside, notes all aspects of the home's general condition, and takes photos of the exterior for inclusion in the report. Whether or not you have cleaned or dusted that day does not matter. What is important is the general condition of the roofing, siding, exterior trim and windows, floor coverings, kitchen and bath(s), etc. Special amenities such as central air conditioning, pools and finished basements are also important.

Gathering data is one of the primary roles of an appraiser. Data can be divided into Specific and General. Specific data is gathered from the home itself. Location, condition, amenities, square footage, lot size and other specific data are gathered by the appraiser during the inspection. General data is gathered from a number of sources. Local multiple listing services (MLS) provide data on recent sales that may be used as comparables. Assessor and tax records provide additional data on subject property and comparable sales. Flood and census information is gathered from specialized online services. Sales are verified with Banker & Tradesman and online registry of deeds services.

When an appraisal is used to secure a mortgage, the appraisal must be ordered by the lender. While the home buyer (or homeowner if for refinance purposes) pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The home buyer is entitled to a copy of the report, but is not entitled to use the report for any other purpose without permission from the lender. The exception to this rule is when a homeowner engages an appraiser directly for other than mortgage purposes.