A Modern Approach to Home Appraisal

by : Andy Asbury

Your home might be worth more than you think. Whether you're happily settled, or getting ready to sell, it never hurts to know how your investment is doing, especially if you've lived in your home for a long time. Population increases, new homes or amenities nearby, and economic trends can all impact on property value, and might change how you feel about your investment.

As an expanding industry, property valuation has become very accessible to homeowners who want some quick numbers. There are a variety of new property evaluation services competing to appraise your property first, and many of them are free. As a result, service from traditional home evaluators has also improved dramatically in recent years.

Getting a home value estimate from a professional appraiser is still the most reliable way of checking your home's value. In the U.S., the quickest and easiest way to find someone for this is through the Appraisal Institutes's list of Associate Members. The Appraisal Institute is the largest and oldest group of professional real estate appraisers in the world, with more than 22,000 members. Here you're likely to find one or two home evaluation professionals in your area, no matter how remote it is. A typical fee from an appraisal institute associate can range anywhere from $200 to $500, depending on the size of your property, and number of buildings on it. Outside the U.S., prominent industry groups include the Appraisal Institute of Canada, and the Royal Institution of Chartered Surveyors.

A professional real estate appraiser can typically use three approaches when evaluating your home: the cost approach; the sales comparison approach; and the income approach. The cost approach estimates the value of your property by summing the land and depreciated value of any improvements, while the sales comparison approach examines the price of similar properties in your area, and the income capitalization approach capitalizes an income stream into a present value, for commercial and investment properties.

Many real estate professionals also offer home appraisals, which they commonly referred to as Comparative Market Analysis. This service usually involves the sales comparison approach, and is almost always offered free of charge, since real estate agents see it as a valuable lead generation tool. A real estate agent can also provide a reliable referral to a professional appraiser.

While hiring a traditional appraiser might provide the most accurate estimate of your home's value, many property owners are taking advantage of free home appraisal services that offer a less accurate figure. The most prominent of these is real estate media source Zillow, which compiles as much information as possible on an area to provide home value estimates.

Knowing your home's value can help you plan for the future more effectively, and decide whether or not it's time to sell. With all the property evaluation resources available these days, you can check up on your investment with little stress and effort.