Comparable Properties
The appraiser will search for properties that will help establish the value of the subject property. The MLS is used to find similar properties that have SOLD within the past few months (preferably less than three months). Active listings are not used because they tend to be greatly overpriced.
The appraiser must account for the significant differences in the properties. These are called adjustments. Large adjustments and a large number of them will cause the appraisal to be less accurate. Here are some of the key features to look at in case you want to provide comparables to the appraiser.
- Similar age.
- Located close to subject. Properties should be in the same neighborhood. If not, should be in a similar neighborhood.
- Square footage within 20%.
- Same style (ranch, two story, tri-level)
- Same foundation (crawl, basement, finished, walkout)
- Water (lake, canal, river) access
- Similar quality of materials (counter types, floor types)
- Similar condition of material (like new vs warn)
- Garage size
Keep in mind that the appraiser must determine a value for differences in each property. This is a data driven process typically done using paired sales analysis. This can be challenging for the higher end houses. Large higher end homes have unique/custom features and do not resell often. More research and data analysis is required. Appraisers often charge more to appraise them due to the difficulty.
Follow next link in the process:
- The Process
- Subject Property
- Comparable Properties
- Property Inspection
- The Report