3 Steps to Interpreting a Residential Appraisal Report

Many people look at a residential appraisal report and do not completely understand what they are looking at. A residential appraisal report is necessary anytime someone buys a property with a mortgage. If you ever go through that process, you may need to understand what the appraisal report says. Here are a few steps to interpreting a residential appraisal report.

Page 1: Information

The first page of the report will tell you the basic ownership of the property, property taxes, type of property, etc. Although the information may seem to be standard, it is critical information because it is what is recorded with the county and what tax assessors and other institutions use.  

The first page will also list the flood zone and zoning of a property. This information is critically important if you want to improve your property or buy insurance.

Page 2: Comparables

In order to determine value, the appraiser must compare your home to other similar homes in the area. The appraiser will compare like properties that have sold within the last six months. Additionally, the property should only be within one mile of your property. The appraiser then had to add to or subtract to your property based on what features it has. These valuations help them come up with an accurate value when compared to other properties. 

The other information that an appraisal report contains are property sketches, maps and appraisal disclaimers. The appraiser must supply a full analysis of why he determined your value so there may also be additional comparables or statements about market conditions.

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