North Carolina is a rapidly changing State, and property values will vary county-to-county, city-to-city, and neighborhood-to-neighborhood. The property appraisal process begins by stating the problem. This includes identifying the property, and the location of the property. The property being appraised should include some sort of legal description, and a formal address, if available. The appraiser should also identify the property rights to be appraised. The most common property rights that are apprised in residential appraisals in North Carolina are what are known as “fee simple” ownership.  This form of property ownership is the highest interest available. Next, a property appraiser should define the type of property value to be estimated. The word value can have many uses, and meanings. Most property appraisers use market value as described by Fannie Mae when appraising a property for a mortgage related transaction.

Next the property appraiser should identify the purpose and the intended use. Before appraising a property, the appraiser and the client should agree on what the appraisal is going to achieve. Again, before the appraiser appraises the property, the appraiser and client should be clear on the intended use of the report. Some uses are for estate settlement purposes, buying/selling decisions, divorce litigation, mortgage related, etc.

A property appraiser will inspect the subject property only to determine the affect on value. For certain mortgage transactions, the property appraiser is required to report in detail all of the observed physical condition of the property being appraised. Other property characteristics are the bedroom count of the property, the amount of updating/renovating the property has received. Furthermore, the appraiser will consider the property condition as it relates to the general neighborhood. For example, a property can be in average condition for the neighborhood, although the actual observed condition can be rated as fair. Depending on the Scope of Work, the property appraiser may sketch the property being appraised.

The Scope of Work rule agreed upon by the client and the property appraiser will determine how much work; data collection, research and analyses are going to be performed. It is very important to discuss this with your appraiser, and get it in writing. Many property appraisers will charge the same price that other property appraisers charge, but will not perform the same amount of work. Like always buyer beware.