What Goes Into an Appraisal?

An Independent Perspective on Value

An appraisal is a professional opinion of value for a specific property, purpose, and effective date. Our role is to analyze the evidence objectively and explain how we reached our conclusion. The result may differ from a contract price, an owner’s expectations, or an online estimate.

Getting to Know the Property

For assignments that include a property visit, we observe the home’s layout, condition, construction quality, and features. We also gather measurements and note improvements, outbuildings, and other characteristics relevant to the assignment.

Finding Relevant Comparable Sales

Comparable sales help show how buyers respond to properties with similar characteristics. We consider location, sale date, size, condition, quality, site features, and other factors when selecting and analyzing sales.

The closest home or most recent sale isn’t always the best comparison. A home on acreage outside Bend may compete in a different market from a similarly sized home in town. We look for sales that help explain the subject property’s place in its market.

Where meaningful differences exist, we analyze whether adjustments are supported by market evidence. A feature’s contribution to value may differ from what it originally cost.

Considering Other Approaches

The methods used depend on the property and the assignment. Alongside comparable sales, we consider whether the cost or income approach is relevant.

The cost approach considers the land’s value and the current cost of constructing the improvements, with an allowance for depreciation. It can provide useful insight for certain properties, including newer construction.

The income approach considers a property’s income-producing potential and relevant rental market evidence. It may be useful when buyers typically evaluate that type of property as an investment.

Bringing the Research Together

We weigh the available evidence and the relevance of each applicable approach to develop a final opinion of value. The appraisal report describes the property, explains the analysis, and identifies the assumptions and limitations that apply.

Our goal is a clear, well-supported report that helps its intended users understand the property’s value as of the effective date.