Understanding your appraisal

Every appraisal is different so reading them can be hard. If your last appraiser used a uniform report, you might notice the similarities in report, but if the appraiser has their own unique report, it’s easy to feel a little lost. Typically, the beginning of the report will have the basics: the property address, a picture of it, who owns it, and when the appraisal was done. It may also have a brief note from the appraiser with the estimated market value listed. The following pages after are simply a breakdown of that value conclusion. On a uniform report, the first page will have six sections. Subject, neighborhood, PUD, site, improvements, and comments. This is probably the page that is easiest to understand and may not have all that much written on it. On the next page is where the breakdown happens. This page will only have three sections, a cost approach, sales comparison, and reconciliation. These three sections are very important. The cost approach will list the square footage to be included in the ultimate valuation, but don’t get too hung up on this number. The next section shows comparable sales of similar houses. While the appraiser will get as close as possible, these numbers may differ. The reconciliation portion may contain notes as to how or why an appraiser reached the valuation conclusion or anything else to consider. After that, there will probably be addendums and pictures. The pictures should show at least three views of the subject property as well as a few comparable properties. You might find a detailed floor plan, neighborhood scope, and things about the market conditions. If you are concerned that any of the information is not correct, you can bring it up with the appraiser, have a second appraisal done, or speak with the lender about the particulars the appraiser noted. It is important to speak with licensed professionals about any existing appraisal as real estate agents or other such people might not know the ins and outs as well.

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