Appraisals are professionally conducted estimates of a property’s actual value, carried out by appraisers. Various items can be appraised, from smaller objects like artwork or jewelry to larger entities such as businesses, commercial buildings, or homes. Appraisals are often necessary before certain transactions, such as securing insurance for a house, piece of jewelry, or artwork. Properties must be appraised for purposes like insurance, loans, and taxes to ensure these financial agreements align with the property’s market value.
There are several types of appraisals. Real property appraisal focuses on estimating the value of real estate, while personal property appraisal determines the worth of valuable individual items like expensive china, jewelry, pottery, artwork, heirlooms, and antiques. Mass appraisal combines both real property and personal property assessments into a single comprehensive evaluation. Business value appraisals assess all tangible and intangible assets a business owns, including logos, services, equipment, property, inventory, other assets, and goodwill.
Home appraisals, perhaps the most common type, are detailed surveys conducted to estimate a house’s market value. Banks often require these appraisals when considering loan approvals for home buyers. Home appraisals provide comprehensive reports covering aspects such as the neighborhood, the house’s condition, the speed of sales in the area, and the sale prices of comparable homes. They can also be used to determine replacement value for insurance or as a sales comparison for marketing a home.
Cost and replacement appraisals estimate the expense of completely replacing a home if it were destroyed, commonly used for new houses.
Sales comparison appraisals compare prices of similar properties in the neighborhood to determine their current market value. The appraiser will then evaluate how these properties compare and contrast with your specific home.
Home appraisals typically cost between $300 to $500 when privately commissioned, but banks usually prefer their own contracted appraisers for independent and a more impartial figure they can trust. Home appraisers are state-licensed and must adhere to high ethical standards, acting as independent third parties to provide unbiased opinions of a home’s market value. They must not be affiliated with any party involved in the sale of the home.
