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Consumer Education

What to Expect During Your Appraisal

An appraisal includes the property observation, but it also includes research, comparable sale analysis, reconciliation, and report development after the visit.

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Purpose

An appraisal is part of a larger decision process.

Appraisals are performed to provide an independent opinion of value for a specific assignment purpose. Residential appraisal assignments may be used for mortgage lending, purchase, refinance, estate, divorce, tax appeal, private valuation, and other approved needs.

In lender work, the appraisal is one part of a larger file. The appraisal report may support a lending decision, but the appraiser does not approve or deny loans.

Roles

Several roles may be involved in a lending assignment.

Each role has a different purpose. Understanding the difference can make the process easier to follow.

Appraiser

The appraiser develops an independent and credible opinion of value in accordance with assignment requirements and professional standards.

Meet Acura Valuation's appraisers.

Lender

The lender uses the appraisal as one part of its collateral and underwriting process, along with other information in the file.

AMC

An appraisal management company may order, assign, coordinate, or communicate about appraisal work on behalf of a lender or client.

Processing department

Processing staff may collect documentation, coordinate communication, and help move the file through client or lender workflows.

Underwriter

The underwriter reviews the loan file for lending requirements and may request additional information or clarification.

Borrower or homeowner

The borrower, homeowner, seller, or REALTOR® may help provide access and property information, even when they are not the appraiser's client.

Before the Observation

Helpful preparation starts before the appraiser arrives.

Before the property observation, it helps to confirm access, gather relevant property records, and share details that may affect the assignment scope. Useful information may include permits, surveys, improvement summaries, listing details, purchase agreements, or known access restrictions.

If an area cannot be accessed, or if the property has unusual features, let the appraiser know early so expectations can be handled clearly.

View Preparation Checklist

Property Observation

During the property observation.

Many people call the visit an inspection. In appraisal work, it is more accurate to think of it as a property observation. The appraiser observes relevant property characteristics, takes notes, and gathers information needed for the assignment.

The observation is not the same as a home inspection. The appraiser is not testing every system or providing a contractor's assessment. The observation supports the appraisal analysis and report.

After the Visit

The observation is only one part of the appraisal process.

After the visit, the appraiser continues the assignment through research, verification, analysis, and report development.

1

Market research

The appraiser reviews market activity, property data, and relevant local market evidence.

2

Comparable sale verification

Comparable sales are reviewed for relevance, reliability, and relationship to the subject property.

3

Analysis and reconciliation

The appraiser analyzes the evidence and reconciles it into a supported opinion of value.

4

Report development

The report is prepared for the intended use, assignment requirements, and professional standards.

5

Client review

In lender work, the lender, AMC, processor, or underwriter may review the report or request clarification.

6

File decision

The lender or client makes its own decision. The appraiser does not approve or deny loans.

Common Misunderstandings

Common misunderstandings about the appraisal process.

These points come up often. The goal is to make the process clearer, not more complicated.

The appraisal is not only the property observation.

The visit is important, but the report also depends on research, comparable sales, analysis, reconciliation, and assignment requirements.

Why the appraiser should not provide a value opinion during the visit.

A credible opinion requires research and analysis after the property observation. Providing a value opinion during the visit can risk predetermination before the appraiser has completed the required market research, comparable sale analysis, reconciliation, and report development. In lender-related assignments, the final value opinion is communicated in the appraisal report and discussed only with the contractual client.

The appraiser does not create the market.

Buyers, sellers, and market conditions create market behavior. Appraisers analyze market evidence.

The appraiser does not approve or deny loans.

The lender and underwriter make lending decisions using many parts of the file.

Reported conditions do not automatically mean approval or denial.

Appraisers report observations and assignment-relevant conditions. The lender or client determines how those items affect the assignment.

The borrower or homeowner may not be the appraiser's client.

In many lending assignments, the lender or ordering client is the appraiser's client, even when the borrower or homeowner is present for the observation.

Property Conditions

Why property conditions may be reported.

Appraisers report observations. Certain property conditions may be noted because of lender guidelines, investor requirements, agency requirements, underwriting requirements, assignment conditions, or professional reporting requirements.

Reporting a condition does not mean the appraiser is approving or denying a loan. The appraiser's role is to report and analyze assignment-relevant information. The lender or client determines how that information affects the file.

Next Step

Have property details ready before the appraisal.

Share the property address, property type, intended use, access details, and any known property information that may help the appraiser understand the assignment.