You were prepared for the inspection but, what will be in the report?
You have just received an email with your appraisal… and it’s so long!
Where do you begin to look?
When working with our private clients we have the ability to provide cover letters.
We like to make good use of that extra step!
So that our client has an immediate answer to their most important questions.
This way, our client does not need to sift through the many pages of explanation in search of one or two pieces of information.
And because we love to overdeliver, we usually include a couple of other answers to what we anticipate their next questions to be.
This is all completed within a few short sentences.
Then, you open the link to see what else is in the report.
This is where the magic unfolds.
Because, in addition to an opinion of value, a reliable appraisal report should tell a story of exactly how and why the home appraiser arrived at their opinion.
Here are 5 important items you should see in the report:
#1 – Neighborhood Description
This should be specific to the area. For example, it should be very obvious that we are talking about South Philadelphia or Valley Forge or New Hope.
It’s important that we are describing the characteristics such as specific nearby amenities, universities, main roads, train tracks or airport.
#2 – Market Conditions
The market conditions should be specific to the Neighborhood. We typically include commentary regarding the larger market area as well.
Using the examples of the specific Neighborhoods above – these areas are all located within Southeastern PA but, they are individual markets.
So, analyzing the specific market conditions is imperative to a providing a supported estimate of value.
#3- Highest and Best Use
The highest and best use of the property should be analyzed and explained.
There are many questions to answer and we begin here:
- Is the use legally permissible?
- Is the use physically possible?
- Is the use financially feasible?
- Is the use maximally productive?
Our client is given the answers to these questions and the reasoning why.
#4 – Description of the Improvements
A detailed description of the property should leave our client with an understanding of the quality and conditions of the improvements.
Is it a historic home with plaster walls, hand carved crown moldings, 14 ft ceiling height, original custom built-in cabinetry, cherry panel library, deep set original windows, walk-in fireplace with original etched/dated mantel, random width wood floors and period hardware throughout?
All of the intended users of the appraisal report should be able to imagine walking through the home.
#5- Comparable Sales Adjustments
A clear explanation of how and why a comparable sale was used and the basis of each adjustment should be included in the report.
The “appraiser’s knowledge of the area” is not sufficient…. adjustments should be based upon factual data shared within the report.
Our client, no matter who they are – homeowner, buyer, attorney, accountant, financial planner, lender – should be able to understand exactly how we determined each adjustment and reconciled the final opinion of value.
Basically, the home appraisal report and it’s results should always be crystal clear.
Be sure that the appraiser has included all of the relevant info about your house in the report:
Fill out this Important List to give to the Appraiser.
“A house is made of bricks and beams. A home is made of hopes and dreams.”
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