How Are Appraised Values Calculated?

An appraisal is a comprehensive report that calculates the value of your home based on a number of valuation factors, ranging from the amount of living space, the age of the home and even its proximity to locations like parks, lakes, schools, and more. The size and location are the main influencer and the exterior, interior, and the features are also calculated in the appraisal process. The two most often used methods of calculating a home value are the sales comparison analysis and the cost approach.

The comparison method uses comps in the area to value the home and then make positive or negative adjustments according to the home’s condition versus the comparables. Each property is unique, which is why the appraiser relies on his or her general expertise and specific research to arrive at an opinion of value. Simply stated, appraisers compare the value of a home with the comparable properties, or “comps,” in the surrounding area.

It should be noted that appraisers aren’t interested in dirty dishes or dusty dressers, but they do notice such signs of neglect as broken windows, cracked walls, damaged flooring, chipped paint, inoperable appliances and worn or torn carpets. An appraisal is not the same as a home inspection. An appraiser’s job is to attach a calculated, reasonable value to the home while an inspector identifies and notifies the homeowner regarding the condition of the home and any repairs required.