What standards do appraisers use to estimate value?

Asked by Trulia Queens, Queens, NY Wed May 22, 2013

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4
Marco Gomez &…, Agent, Jackson Heights, NY
Wed May 29, 2013
They generally look within a half mile to 1 mile radius in heavily populated areas and sales within the last 0-6 months in heavily populated areas.
1 vote
Joseph Hasti…, Agent, Bayside, NY
Sat May 25, 2013
The standards are one thing. It is another thing to look only at price and not condition or quality. This aspect seems to be lost on appraisers in this relatively new sellers market or at least in my market. I had an appraisal come in low on a Coop sale. It's main comps were three sponsor units in the building that came onto the market at ridiculous prices and in unrenovated condition. Two of which didn't have a Terrace and two others that were on lower floors and also missing a half bath. Yes, Coops are unique to Manhattan and the boroughs but valuation via appraisal could use some help.

Evidently to CitiBank, there is no difference between a renovated unit on a higher floor with a Terrace and extra half bath in comparison to sponsor units in estate condition, no Terrace or half bath. I appealed with an explanation of the differences and other comps less than 1/8 mile away that are in line with current pricing. The appeal was rejected. We had the buyer come up with more cash to cover the shortfall. Either way, my client wins.

IMO, we are on the crest of a wave of a priceing uptick that Banks are slow to enbrace or even acknowledge. Hopefully they'll catch up soon.
0 votes
Robert DiAlb…, Agent, Coral Springs, FL
Thu May 23, 2013
Steve gave a pretty good answer with the link he attached but here is a quick answer. The appraiser uses 3 approaches with recent comparable sales being the most important in my opinion. The second approach is cost approach which is what it would cost to buy the land and build the same house on the property (while also considering the age of the home being appraised), The 3rd approach is the income approach which uses a return on rental approach (this approach is more applicable for income properties).
0 votes
Nice reply. How is your market?
Flag Fri May 24, 2013
Steve Parsons, Agent, Salisbury, MD
Wed May 22, 2013
There are 3 approaches to value used in the United States. It would take forever to explain them, so I direct you to the website below.
0 votes
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