The appraiser receives an order, either verbal from a home owner/borrower or via email from a lender.
Information is gathered on the subject property, including, but not limited to: if it is a sale the contract is analyzed and if it is a refinance or other for another purpose the prior sale history is analyzed, then size, age, condition, quality of construction, recent upgrades or improvements are considered. Other items the appraiser is seeking are the legal description, a survey of the lot or lot dimensions, deed restrictions and easements or encroachments and the zoning designation.
Then research is conducted on the neighborhood and current market conditions and trends and comparable property selections are made.
If the property is new construction the plans and specifications are analyzed along with other, similar new construction properties in the area.
If the appraisal is for an income producing property (rental), rental properties in the market are analyzed.
The appraiser will then conduct a “property visit,” also known as an inspection (although the appraiser does not conduct as thorough an inspection as a Home Inspector does). Information is gathered during the inspection and a sketch with measurements is drafted, photos of both the interior and exterior are taken, deferred maintenance or items requiring repair are also noted.
Back in the office the appraiser writes a lengthy report on an appraisal form which is appropriate for the property type. The completed report is made up of the form itself, a narrative of some aspects of the property, photos, maps and some standardized information.
When completed, the appraisal report is sent to the lender or borrower.
In the case of the lender, internal analysis is conducted by the underwriting team and a decision about if and how much they are willing to lend on the property is made. This is also contingent upon the specific borrowers creditworthiness, not just the results of the appraisal.