What is a Home Appraisal?

A home appraisal is used to determine the market value of your home. This is formally known as a market analysis or fair market value comparison. An appraisal is an estimate of worth of a property in a competitive and open market.Appraisals are important in selling, buying and getting a home loan. Whether you are moving down the street or across the country, an appraisal is important in selling your property. As a seller, you want the best price for your home and this process can help you. Buyers on the other hand need to know if the value appraised is more or less than the asking price.A home appraisal can either be affordable and fast, or costly and time-consuming. You can do the latter by hiring a professional to come and appraise your property or you can do the former by consulting a web-based service that could access the data and be able to make a report fast. Both kinds of appraisal have the same information and the guidelines are the same.An appraisal should be professional, unbiased opinions of your property and its market value based on its quality of construction, functionality, appearance and the value of comparable homes in the market.Steps in Appraising a Property1. The value of your home could be estimated through a comparison of similar properties sold recently. You could start appraising your home by looking at your neighborhood to find similar homes in neighborhoods that have the same lifestyle, surroundings, average age, income level of residents and home values. You may also consider recreational facilities similar to your situation. The aim is to find similar home value in the same neighborhood for your home appraisal.2. Determine the price of your property is to compare it to the fair market value. The fair market value comparison uses the principle of substitution. This states that the maximum value of your home is set by the sales price of an equally desirable, similar substitute house for a certain time and day. You need to find at least three recently sold homes that have the same characteristics and amenities that yours have.3. Make adjustments between comparable homes and your home. This equalizes the properties being compared. The comparable homes are adjusted in order to get the value of the subject home. You do not adjust the value of your property. If two comparable houses are identical with yours except that your property has a deck and the two does not have, then this could mean a higher value for your home.It is important to get your house ready for an appraisal. Remove clutters and try to make your home clean and cozy. If possible, you can upgrade your home and repaint it to have a fresh appealing look. This way could add up to the appraisal value of your home. The best way to appraise is a careful research of the final criterion. The value of similar properties defines the trends in the market. Keep an eye on this and change your selling strategies.