Quick Takeaways

  • “Valuing real estate is difficult since each property has unique features such as location, lot size, floor plan, and amenities.”
  • “General real estate market concepts like supply and demand in a given region will certainly play into a particular property's over-all value.”
  • “Individual properties, however, must be subject to appraisal, using one of several methods, to ascertain a fair value.”

Source: What You Should Know About Real Estate Valuation (Investopedia, Dec. 31, 2021)

Appraisal and valuation are extremely important steps in any home buying and/or selling transaction.  A professional appraiser will use the home inspection and current housing market to provide an appraised value, which is very important to the home loan process. There are different methods to valuing a home, and the value of the home is often not the same as the price or cost.

In the past few years, much light has been shed on discriminatory appraisals. Unfortunately, there have been numerous appraisals in which a Black homeowner gets a much lower appraisal than when the appraiser thinks the home is owned by a white homeowner. The Biden Administration recently released the PAVE (Property Appraisal and Evaluation Action Plan) in order to target this deep-rooted discrimination.

NAR Provides members with a great deal of appraisal resources. REALTORS® can access a variety of appraisal education as well as receive two appraisal related designations, General Accredited Appraiser (GAA) and Residential Accredited Appraiser (RAA). We also highly recommend the use of RPR, The REALTORS® Property Resource®.

The National Association of REALTORS® also supports appraiser independence. Please read our Appraiser Independence Page and our Responsible Valuation Property Policy for our complete stance.

The agent/appraiser relationship is an important one, and NAR has multiple resources for REALTORS® to improve communication between the two. You can watch our Window to the Law: Working with Appraisers video or read the Residential Appraisal Process: FAQ for Agents to educate yourself on the process.

Appraisal Management Companies (AMCs) are an option for lenders and appraisers to consolidate the process of obtaining a home appraisal. NAR supports the regulation of AMCs through FIRREA, the Financial Institutions Reform and Recovery and Enforcement Act.

See References for more information.

Advertisement