Sep 29, 2020


For sellers,  For buyers


Obtaining a home appraisal is a very critical step in the home-buying process. A home appraisal provides you the best determination of the value of your real estate. The home appraisers value your property by having a walk-through of your house. They usually use one of the two standard valuation methods i.e., sales comparison approach or the cost approach. Usually, an appraiser might apply both techniques to point an extremely accurate value.

What is a home appraisal?

Whether you are to buy a home using a mortgage or refinance the existing mortgage or sell the house to anyone with the help of any of the Colorado licensed realtors, a home appraisal is considered a critical component of the transaction.

An appraisal is the opinion of the value of the home that is professional and unbiased. Appraisals can be used almost always in the purchase-and-sales transactions. It helps determine whether the house’s contract price is appropriate given the condition, features, and location of the home.

How does an appraiser determine property value?



Unlike any other form of home valuation, like the report put together by the Colorado real estate agent, a home appraisal is prepared by a licensed home appraiser. This is a professional who looks at a variety of factors when they value real estate. They consider the size of the home, layout, and how well the house has been maintained. They also take into consideration the surrounding properties and recent sales of the homes that are similar.

A walk-through is considered a first step in the residential home appraisal process, and it can easily be an essential part of the entire process. The appraiser visits home and performs a visual inspection of the property inside and outside.


Usually, the appraiser starts by inspecting the house’s exterior visually, examining the complete structure, and assessing different materials used to construct the home. He/she will be paying very close attention to the home’s foundation to find out if there are any cracks and signs of water damage.


Although it is not the appraiser’s duty to assess the value of the home-based on décor, a clean and well-maintained house will be better than a cluttered or a dirty one. Staging your home can increase its value dramatically. Appraisers always look at the building materials that include light fixtures, flooring, windows, and doors. They also consider the number of bedrooms and square footage.


When the appraiser is inside, he will be looking at the home’s amenities, and this includes all the little things that can make a house more comfortable. Amenities like security systems, air conditioning, and custom window treatments all set a home apart from the other properties and increase market value.


Significant upgrades dramatically raise the price of a home. The home appraiser will be considering things like appliances, kitchen cabinets, and countertops. If you have upgraded your home, you must keep all your receipts and invoices to prove how much you spent on different materials and labors.

Home valuation methods

After a detailed walk-through, the home appraiser will be using one of the two valuation methods to assign a final value to the home. There are possibilities that the appraiser might use a combined approach to get possibly the most accurate number.

Sales comparison approach

The sales comparison approach is, by far, the most popular appraisal method. It determines the home’s fair market value in the Colorado investment properties and compares similar houses sold recently in the surrounding neighborhoods. The professionals commonly refer to these properties as comparables or comps.

Cost approach

The cost approach calculates the cost by replacing the entire home using local labor and construction materials. The appraiser finds out the value of the lot, estimates the cost of reproducing the house, and considers the home’s age and condition by calculating depreciation. The depreciation figure is subtracted from the total replacement cost, and any external improvements are added. In the end, the lot value is added to the full amount of improvements, and the depreciated value arrives at an accurate replacement cost.


If you perform an appraisal before listing, it offers you an opportunity to correct any problem-related areas that might deter your buyers from making an offer. Fortunately, most of the time, there are easy fixes that you can handle on your own. Your best realtor team will also encourage you to make the home improvements by yourself as it is an economical way to add quick value to your home. Making changes will save money and time for you in the long run.

Have any questions regarding the topic “HOW APPRAISERS DETERMINE HOME VALUE?” Feel Free to comment down below.

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