The Appraisal Process


If you plan to sell or buy a home soon, you likely have questions about appraisals. If so, you may find your answers below. This information comes compliments of Blake Early of Cream City Mortgage, a lender with years of expertise and relationships with bankers, appraisers, underwriters, agents, and buyers.

Q: My home and neighborhood are not part of a defined neighborhood association (this could also apply to a subdivision). How do appraisers typically assess these types of homes?  Do they consider a radius or just the surrounding  neighborhood(s)?

A: This really depends on the neighborhood. Appraisers will use comps from the immediate subdivision or neighborhood OR street—but only if there are good or similar comps. Sometimes if there aren’t good comps, they will consider nearby subdivisions or neighborhoods, but only if they are comparable in overall values. Ideally, appraisers will look at similar homes that have sold in the last 6 months within a one-mile radius, though appraisers will consider homes outside these parameters to find reliable comps. 

Q: The appraisal report itself talks about a “balanced market.” What is this referring to?

A: A balanced market is an equation. It is based on the number of homes on the market under contract and sold in a certain time frame. Appraisers will also consider the market in general and whether it is increasing, stable, or declining as a whole. 


Q: What time frame do appraisers consider when valuing a home? 

A: Investor guidelines allow appraisers to go up to 12 months back—further if absolutely necessary but only if it they can  thoroughly explain why doing so is necessary. Most appraisers will start at 6 months and will only venture back further if there aren’t enough comparable properties.


Q: How much do you look at/weigh finishes as opposed to the stats or features of the home? For example, if the entire shower wall is expensive, book-matched marble, does that hold more value than just a regular white marble subway tile shower? 

A: One high-quality feature isn’t going to change the value of your home. However, if the property has extensive, quality work throughout the property, then you could argue it should have more value—but all details would need to be supplied to the appraiser for consideration.