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Appraisal reports follow standardized formats that contain detailed information about the property, comparables, and value conclusion. Understanding how to read these reports helps property owners verify accuracy and understand how value was determined. Borrowers are entitled to receive a copy of any appraisal they paid for.

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Report Sections

Identifies the property being appraised:
  • Property address
  • Legal description
  • Owner of record
  • County and tax ID
  • Map reference
  • Census tract
  • Occupancy status
  • Property rights appraised
Verify address and basic information is correct.
For purchase appraisals, includes transaction details:
  • Contract price
  • Date of contract
  • Seller concessions
  • Financing type
  • Is property currently listed?
  • Prior sales history (last 3 years)
Appraiser analyzes whether contract price is consistent with market.
Describes the surrounding area:
  • Location type (urban, suburban, rural)
  • Built-up percentage
  • Growth rate
  • Property values trend
  • Demand/supply balance
  • Marketing time
  • Predominant occupancy
  • Price range and age range
  • Land use percentages
Neighborhood characteristics affect value and marketability.
Details about the land:
  • Lot dimensions and area
  • Shape
  • View
  • Zoning classification
  • Zoning compliance
  • Utilities available
  • Off-site improvements (street, sidewalk)
  • Flood zone designation
  • FEMA map information
Site characteristics can add or detract from value.
Describes the buildings:
  • General description (units, stories, design)
  • Foundation type
  • Exterior description
  • Interior description
  • Heating and cooling systems
  • Amenities
  • Car storage
  • Gross living area
  • Basement details
  • Condition and quality ratings
This section contains the most detail about the property itself.
Heart of the appraisal showing comparables:
  • Comparable property details
  • Sale price and date
  • Location comparison
  • Site comparison
  • Design and quality comparison
  • Age comparison
  • Condition comparison
  • Room count comparison
  • GLA comparison
  • Basement comparison
  • Amenities comparison
  • Adjustments for each difference
  • Adjusted sale price
Shows how appraiser arrived at value through comparison.
Appraiser’s final analysis:
  • Summary of approaches used
  • Weight given to each approach
  • Final value conclusion
  • Effective date of value
  • Exposure time estimate
Explains reasoning behind final value opinion.

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Reading the Comparable Grid

Adjustments modify comparable sale prices to account for differences from subject property.Adjustment direction:
  • If comparable is BETTER than subject: Negative adjustment (subtract from comp price)
  • If comparable is WORSE than subject: Positive adjustment (add to comp price)
Goal is to estimate what each comparable would have sold for if it were identical to subject.
Typical adjustments include:
CategoryTypical Range
Location$5,000 - $50,000+
Site/lot size$1,000 - $20,000
Quality$5,000 - $30,000
Age$1,000 - $15,000
Condition$5,000 - $30,000
GLA (per sq ft)$30 - $100 per sq ft
Basement finish$10 - $50 per sq ft
Garage$3,000 - $15,000 per space
Bathrooms$3,000 - $10,000
Fireplace$1,000 - $5,000
Pool$5,000 - $25,000
Adjustment amounts vary by market.
Net adjustment: Sum of all adjustments (positives and negatives combined)Gross adjustment: Sum of absolute values (all adjustments added regardless of direction)Guidelines:
  • Net adjustment over 15% raises questions
  • Gross adjustment over 25% suggests weak comparable
  • Individual adjustment over 10% needs support
Large adjustments indicate comparable may not be ideal.
After all adjustments, each comparable has an adjusted sale price.Example:
  • Comparable sold for $350,000
  • Adjustments total +$15,000
  • Adjusted sale price: $365,000
Appraiser considers range of adjusted prices to develop value conclusion.
The comparable requiring the fewest adjustments is typically given most weight. A comparable with minimal adjustments is more reliable than one requiring extensive modification.

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Quality and Condition Ratings

Q1: Unique, highest quality
  • Custom architectural design
  • Highest quality materials
  • Exceptional craftsmanship
Q2: High quality custom
  • Custom design
  • High quality materials
  • Above standard craftsmanship
Q3: Above average
  • Good quality materials
  • Above average craftsmanship
  • Some custom features
Q4: Average/standard
  • Standard materials and design
  • Adequate craftsmanship
  • Typical tract or production home
Q5: Fair/basic
  • Economy materials
  • Basic design
  • Minimal features
Q6: Poor/substandard
  • Below standard materials
  • Substandard construction
  • Significant quality issues
C1: New construction
  • Recently completed
  • No physical depreciation
  • All components new
C2: Like new
  • Very recent construction or fully renovated
  • No deferred maintenance
  • All systems updated
C3: Well maintained
  • Limited physical depreciation
  • Minor deferred maintenance
  • Regular upkeep evident
C4: Average condition
  • Some physical depreciation
  • Minor repairs needed
  • Adequately maintained
C5: Fair condition
  • Obvious deferred maintenance
  • Repairs needed
  • Some items at end of life
C6: Poor condition
  • Significant deferred maintenance
  • Major repairs required
  • Substantial depreciation

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Common Report Elements

Above-grade finished living space measured in square feet.Included:
  • All above-grade finished rooms
  • Finished attic areas meeting ceiling height requirements
Not included:
  • Basement (even if finished)
  • Garage
  • Unfinished areas
  • Porches and decks
GLA is primary size measure for residential appraisals.
Basement square footage reported separately.
  • Total basement area
  • Finished basement area
  • Partially finished area
  • Unfinished area
Below-grade space valued less per square foot than above-grade.
Reflects property condition, not actual age.Example:
  • Actual age: 40 years
  • Effective age: 20 years (due to extensive renovation)
Well-maintained homes have effective age below actual age. Neglected homes may have effective age above actual age.
Estimated time property would have been on market if offered at appraised value.Typical ranges:
  • Hot market: 30-60 days
  • Normal market: 60-90 days
  • Slow market: 90-180 days
Longer exposure time suggests less marketable property.

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Verifying Accuracy

Verify these details match your property:
  • Square footage
  • Room count
  • Bedroom and bathroom count
  • Garage spaces
  • Basement size and finish level
  • Year built
  • Lot size
Errors in basic characteristics directly affect value.
Confirm updates and improvements are captured:
  • Kitchen renovation date and scope
  • Bathroom updates
  • New roof, windows, HVAC
  • Addition or expansion
  • Finished basement
  • Other significant improvements
Missing improvements may understate value.
Review whether comparables are appropriate:
  • Are they truly similar properties?
  • Are they in same or competing neighborhood?
  • Are sale dates recent?
  • Are adjustments reasonable?
Inappropriate comparables can skew value conclusion.
Check that photos accurately represent:
  • Current condition
  • Updates and features
  • Any issues noted
Photos should support condition rating assigned.
If you find errors in the appraisal report, document them and contact the lender. Factual errors can be corrected. Disagreements about value require formal reconsideration process with supporting evidence.

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Report Types

Uniform Residential Appraisal Report. Standard form for single-family homes.
  • Full interior and exterior inspection
  • Complete comparable analysis
  • Most common residential form
  • Required for most mortgage transactions
Individual Condominium Unit Appraisal Report.
  • Specific to condo units
  • Includes project analysis
  • HOA and budget review
  • Condo-specific comparables
Small Residential Income Property Appraisal Report.
  • For 2-4 unit properties
  • Includes income analysis
  • Rent comparables
  • Both income and sales approaches
Exterior-only appraisal without interior inspection.
  • Used for lower-risk transactions
  • Cannot verify interior condition
  • Lower fee than full appraisal
Detailed written report without standardized form.
  • Used for complex properties
  • More explanation and analysis
  • Common for litigation and estates
  • Higher fee due to additional work

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Using Report Information

Report tells you:
  • Independent value opinion (does price make sense?)
  • How property compares to others
  • Condition assessment
  • Neighborhood analysis
  • Potential concerns noted
Use to confirm you’re paying fair price.
Report tells you:
  • Market-supported value
  • How your home compares to competition
  • Adjustments buyers consider
  • Features adding or detracting value
Use to understand buyer’s perspective on value.
Report tells you:
  • Current market value
  • Equity available
  • Loan-to-value calculation basis
  • How value has changed since purchase

Next: Low Appraisals

Options when value comes in below expectations

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