How We Appraise
HOW DO WE APPRAISE?
Every property is unique and arriving at a final value is arrived at through extensive market research, specialized knowledge of the market area, third party resources and critical thinking.
There are actually 2 parts to an appraisal. One is the appraisal which is the final value and one part is report of the value. It is one thing to state a value of a home but another thing to put it in a format that the client can understand the rational of how the appraiser reached the value. A typical appraisal involves the following…
- Visit to the subject property
- Collection of property data ie – dwelling size, features of the property, condition of the property, location of the property in connection to the surrounding area, pictures are taken, determination of effective age of dwelling, determination of features that contribute to market value.
- Once back to the office the appraiser researches your property and obtains background information from mpac, geowarehouse, municipal office, real estate company (if listed for sale). These sources are used to determine lot size, zoning, legal description, last sale date, if listed, etc.
- The cost approach to value is completed using the costing software from Marshall and Swift. This company is one of industry leaders in real estate costing. This software not only breaks down the cost of constructing your home but considers extra features and depreciation.
- After this an extensive search is made for suitable comparable sales to develop the sale comparison approach to value. We search mls sales similar to your home in your area. We also search private sales and exclusively listed sales in your area. We also have access to an extensive data base of comparable sales in our office files. Do to the size of our office chances are really good that we have been in of have excellent data on all of the homes in your area. Once the best comparable sales have been selected we make adjustments to equate for the differences between your home and the comparables. These adjustments are arrived at by comparison of paired sales for by a process of abstraction. Our adjustments are market driven and not arrived at by guess work.
- If your property happens to be an income producing property (duplex, triplex, etc) we complete a value comparison using GRM (gross rent multiplier) GIM (gross income multiplier), value per unit and value per bedroom.
- Once all of the above has been considered and calculated the information is reconciled to arrive at the current market value of your property.
- Also including in the report are pictures of your property, pictures of the comparable sales used, plot maps, and location maps of subject and comparables.
- A typical report is 15-20 pages in length full of valuable information.