The Appraisal Process
An appraisal is a fair market value derived from comparable sales in the neighborhood. It can affirm your offer price or block your transaction entirely. All appraisals must conform to guidelines set by the Federal Government, but every appraisal is ultimately a subjective analysis of a property's current market value. To determine current market value, an appraiser will compare the price of your home with that of at least three comparable homes that are in the area and have sold within the past year, then adjust for differences between comparables and subject property such as lot size, square footage, updating, etc. An appraiser will physically measure and inspect the home (which doesn't qualify as a home inspection) to compare, and may also take photographs to include in the report with floor plans and a site map. Appraisers are licensed by the state of Michigan under federal guidelines. All appraisers must abide by professional and ethical standards set by the Government. Our Grosse Pointe community has a variance in home styles, neighborhood values, etc. The appraiser selected should be from Grosse Pointe and familiar with the Grosse Pointe community.
Inexperienced appraisers with a lack of training can result in appraisal problems. Appraisers are certified by the individual states under federal guidelines, but only half the states require actual licenses. Most states do, however, require appraisers to pass a written examination and have 75 hours of continuing education and 2,000 hours of direct experience through an apprenticeship. Most appraisers also have to abide by professional and ethical standards set by industry organizations.