What Appraisers Look for To Decide Your Home’s Value

Dawn M. Smith
Written by Dawn M. Smith
Updated August 23, 2021
Iriana Shiyan - stock.adobe.com

Home appraisers combine hours of on the ground and behind the scenes research to determine the value of a home

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Home appraisals determine the value of a house, which is vital during the home buying, selling, or refinancing process. You know their decision is important, but you’re probably wondering what exactly goes into the report. For example, does it matter if your granite counter is chipped (probably not) or if the HVAC system is outdated and on its last legs (most likely, yes)? 

Experienced appraisers use a ton of research to produce their opinion of value. They’ll evaluate your location and neighborhood, research similar houses that have recently sold and visit the house to check out the condition.

What Is a Home Appraisal?

For a quick refresh about appraisals, remember an appraisal is an opinion of value based on data from the houses sold near your home’s location (comparables) and the house’s overall condition. Buyers and home loan refinancers need appraisals from a neutral, third-party appraiser to assure their potential lender that the property has enough collateral to satisfy the loan.

Appraisals are like report cards grading your house. Banks and lenders want to make sure lending you money is a good investment. 

On the other hand, home sellers are interested in appraisals because they ultimately affect the asking price, pushing it higher or lower. It’s no fun for the buyer or the seller if an unexpected appraisal amount comes back. The home sale usually stops for a renegotiation.

If you’re looking to sell (and have some time before your appraisal), upgrading your roofing can help boost your home’s value.

"A home’s value is based on two things: aesthetic and functionality,” says Kevin Reifsteck, licensed roofer at Huuso Exteriors. “If you’re looking to increase your return on investment aesthetically, metal roofs or valleys, copper flashing, and awnings will help."

What Should I Expect From the Appraisal Process?

First, your lender will contact a licensed or certified home appraiser near you. They will take a look at the property and determine the scope of work needed to get the best overall assessment of the property. 

Usually, lenders want interior and exterior inspections to develop the opinion of value for a home purchase or a refinance. But not all appraisals require both; it just depends on what the lender wants to see.

What Appraisers Look for During the Appraisal Process 

You can ask what form the appraiser uses during their walkthrough, but it’s most likely the Uniform Residential Appraisal Report. Knowing specifically what the appraiser is looking for helps you prepare for the visit, but remember two things: they’re not interested in your home decor. There’s no reason to buy a sofa or choose a new coffee table. And, not every improvement you make increases a home’s resale value

Plan for the visit to be a couple of hours. The timing depends on what the lender asks them to inspect—the interior, exterior, or both. 

Appraisers inspect these factors:


  • Meets housing codes, including health and safety specifications

  • Total square feet of the bedrooms, bathrooms, and kitchens

  • Strength of the structural components and the overall living condition of the house

  • Appliances and utilities throughout

  • How well the space is used, how functional the layout is

  • State of the HVAC and plumbing systems


  • Age of the house and overall construction quality

  • Integrity of the roof, foundation, siding, and gutters

  • Location of the house, the neighborhood, and where the property site sits

  • Driveways and other parking

As a home seller, you might want to supply the appraiser with more information to get the most accurate valuation. Helpful information includes details about the property’s sale and rental history and any agreements made with neighbors about fences, walls, or easements on the property. 

Talk to your real estate agent for advice about delivering the information and how much a home appraisal will cost in your area. Most people spend between $310 and $400.

What Else Does the Appraiser Use to Form the Opinion of Value?

After the house’s physical features, the appraiser’s market data from the surrounding area is the next set of information needed to prepare the appraisal. They’ll research public records from the county or city and talk with local real estate professionals about current listings, previous sales, rental leases, land, and new construction costs. They’ll also access the Multiple Listing Service (MLS) for more information about the current real estate market.


Comps, as they’re known, are a huge factor for forming the value opinion. Recent sales or currently listed properties with similar features (age, size, location, amenities) help predict the final appraisal report. Sometimes if the appraiser doesn’t find the information they’re looking for, they’ll interview agents with properties listed nearby.

Three Approaches to Form the Opinion of Value

An appraiser can use one or more approaches to evaluate the property. The options they pick depend on the type of property, reason for appraisal, and how much information is available.

Sales Comparison Approach

Often used as the first method for creating the value opinion, the sales comparison relies on recent sales of comp properties. The appraiser looks at similar features like the number of beds and baths, garage, style, age, and land size.

Cost Approach

With this approach, the appraiser shares what they think it would cost to build a replacement of the existing house, plus the land value, but minus depreciation. Appraisers often use this method for new houses that haven’t had the time to depreciate, if at all.

Income Approach

If the property you’re considering buying has multiple living units, your appraiser will likely use the income approach because the rental income earned is a component of the buying and selling decision-making process. This approach uses the property's potential annual income to calculate its fair market value.

What Happens After the Appraiser Is Finished?

After the appraiser calculates the values produced by the various approaches, they compile all of the data from the previous research, including comparables and the house inspection visit, to complete the final opinion of value. The lender then receives the appraisal and decides whether it's a good investment for them to lend you the money.

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