A real estate appraiser estimates the market or resale value of a property and the buildings on the property before ownership is transferred to another individual or entity. The appraiser uses established criteria to make the assessment.
Real estate appraisers work in areas they are familiar with. They are well aware of the environmental issues or other logistical information that may alter the property’s value. Appraisers usually focus on one segment of the market such as residential, commercial, or industrial real estate.
Appraiser Role and Responsibilities
An appraiser is typically responsible for the following duties:
● Verify legal descriptions of properties according to public records
● Inspect new and existing properties, highlighting unique characteristics
● Take photos of the interior and exterior property including the buildings
● Compare the property with nearby properties to estimate the value
● Submit reports detailing the property’s value
● Maintain and update data on properties
Unique Property Characteristics
Appraisers assess a property’s value based on unique characteristics that set the property apart. Characteristics may include:
● Surrounding area and neighborhood
● Environmental hazards or conditions
● Structural stability of the building
● Internal system function (electrical, plumbing, AC, etc.)
● Recent renovations in or around the building
● Code violations
● Energy efficiency or proper insulation
● And more
Establishing the Property’s Market Value
After visiting the property, the appraiser estimates the total value of both the grounds and the buildings. The appraiser considers several factors including:
● Comparable home sales
● Lease records
● Location
● Outside view
● Past appraisals
● Income potential
● School and neighborhood
● Buyer repairs or renovations
During the entire process, the appraiser records all research, observations, and methods he or she used in calculating the property’s value. They submit the reports as accurately as possible to give an estimate.
An Honest and Unbiased Report
Banks or lending institutions, homebuyers, home sellers, real estate companies, or government agencies can hire appraisers. Regardless of who hires them, however, their job is to provide an accurate and honest assessment of a property.
Therefore, they do not represent any individual or entity including the party that hired them to do the job. Failure to provide an incomplete or inaccurate can have devastating consequences for homebuyers, sellers, or any party that has a stake in the property. The appraiser may also lose his or her job or face stiff penalties and fines for withholding or falsifying information.
Why Does an Appraiser Get Hired?
A party that hires an appraiser generally has a personal stake in the property. Some examples might include:
● A bank or lending institution has a lien on the home and wants to assess the value to determine a potential mortgage.
● A flat-fee real estate agency hires the appraiser because they have a client wanting to purchase the property.
● A homeowner wants to find out what adjustments, renovations, or upgrades they need to perform on the house.
● A government agency needs to determine if the property contains any code violations or needs to be condemned.
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