An Appraiser's View

September 27th, 2022 3:31 AM
A recent price shopper asked me "If online valuations are free, why does an appraisal cost so much?" The reason is both simple and complex. The simple is, online valuations aren't required to be unbiased or accurate. Providing an accurate opinion of value requires an inspection not only of your property, but a neighborhood inspection, and a street inspection of all sales deemed relevant. This takes extensive time, gas, and unbiased reasoning. If you don't need an unbiased accurate opinion of value, I will tell you. But first I must know the reason you want an appraisal. That's where it gets a little complex.
In every appraisal request I determine the scope of work before I provide a fee quote. It is as important for me to understand the reason you need an appraisal as it is to have the details on what is being appraised, because the time needed to inspect and complete an appraisal depends on the purpose of the appraisal. The fee is based on the time needed to provide an accurate opinion of value. Although there are typically only 3 or 4 sales plus a listing or two in the reports I complete, those sales are selected after extensive research into 20 to 30 sales from within the market.  Rarely are the 3 sales you see the "easiest" sales, which is what online valuations use. The average time to complete an appraisal today is 10 hours. Add in the cost of a vehicle, gas, yearly schooling, tools needed, mls access, insurances, software, etc. and the cost per appraisal easily exceeds $500. It's possible that you can hire an appraiser for less, but based on the math, you may end up with the equivalent of an expensive online valuation.
When shopping around remember, your are getting an appraisal because you need an accurate opinion of value, so you might want to hire an appraiser who is good at math.      


Posted by Jeff Pickerel on September 27th, 2022 3:31 AMLeave a Comment

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