Home Appraisals

Real Estate Appraisal Valuation

  • An opinion of the estimated value of land and property formed by a licensed appraiser.
  • The appraisal value is based on a comparison on similar properties sold recently.
  • Based on the highest and best use of real property.
  • The appraisal value is based on a likely sales price in an open and competitive market.
  • The need to sell rapidly is not taken into account.
  • Other special circumstances are not taken into account.
  • Lenders may use either the appraised value or sale price, whichever is lower to determine the amount of the mortgage to be offered.
  • This is not a home inspection and does not determine true value.


Types of Value

Market Value

The price at which an asset would trade in a competitive Walrasian auction setting. Market Value is usually interchangeable with Open Market Value or Fair Value. International Valuation Standards (IVS) define Market Value as: the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties had each acted knowledgably, prudently, and without compulsion.


The net present value (NPV) of a cash flow that an asset generates for a specific owner under a specific use. Value-in-use is the value to one particular user, and is usually below the market value of a property.

Investment Value

is the value to one particular investor, and is usually higher than the market value of a property.

Insurable Value

The value of real property covered by an insurance policy. Generally it does not include the site value.

Liquidation Value

This may be analyzed as either a forced liquidation or an orderly liquidation and is a commonly sought standard of value in bankruptcy proceedings. It assumes a seller who is compelled to sell after an exposure period which is less than the market-normal timeframe.


Types of Appraising

Comparable Market Sales (Comps)

When you sell your home, an Appraiser will use comps (comparable market sales) of local properties sold within the last six months or so to value your home. With today’s declining seller’s market, six-month-old information may be old history. Appraised value does not always equal the true market value, or what the home will sell for on the open market.

Comparative Market Analysis (CMA)

A Realtor will give you a comparative market analysis – CMA – an informal estimate of market value based on comparable sales from the last few months.A Lender will use the appraised value to determine a new mortgage amount. Some lenders require that in case of foreclosure, the stated property value is ample enough to cover the mortgage amount plus their selling costs. Consequently, a sale may possibly fail if a home sells on the open market for more than the appraised value, which often happens in bidding wars over a desirable piece of property.