In an effort to educate, as well as emphasize the importance of a quality appraisal, we have posted some of the questions that our clients often ask us about, in regards to appraisals. These are by no means a complete explanation of the appraisal process, but should help answer your initial questions. Have further questions? Please give us a call today, we will be happy to help walk you through the entire process.

Q: What is an appraisal?
A: An appraisal provides a supported opinion of value as a specific date based on diligent research and observation while complying with the Uniform Standards of Professional Practice (USPAP).

It is determined by comparing the subject property with a minimum of three properties selected by the appraiser which best support the opinion provided. The desire is to have three identical comparable sales which sold the day of the appraisal but this is unrealistic, especially in Massachusetts. The comparable sales are adjusted to reflect the differences from the subject property.

Q: What is the difference between an appraisal and a "BPO" Brokers Price Opinion?
A: A BPO is provided by a realtor, typically not a licensed appraiser who has to conform to USPAP. The report is not nearly as detailed, the estimate is usually given in a range and may or may not be objective since a listing may be desired.
 
 

Q: Why do I need an appraisal?
A: Appraisals are predominatly provided to:

• Lending institutions (banks/mortgage companies) for refinance, purchase, equity loans, relocations, reverse mortgages, foreclosures, bank owned properties and Private Mortgage Insurance removal.
  
• Individuals and attorneys for estates, family disputes, divorce, mediation, tax purposes.
  
• Individuals for potential purchases, including tenants. You may learn more than you think through an objective set of eyes.

Q: How does the process work?
A: The appraiser schedules an inspection appointment, takes a slow walk through the interior, measures the exterior and takes photographs of the property. The remainder of the process is research and completing the appraisal.

Q: What is the difference between an appraised value and an assessment?
A: The assessed value for a 2008 tax bill would be derived from sales which occurred from January 1, 2006 to December 31, 2006. An assessed value is derived from many sales. An appraised value is derived from the most recent, similar, proximate sales available.