Reading a home appraisal might feel overwhelming at first, but worry not! This guide is here to simplify the process.

While each appraisal may have slight variations, the following structure offers a general roadmap to help you smoothly navigate through it. The key is to approach it in a linear manner, starting from the first page and following the logical flow. Whenever you come across “see addendum,” simply refer to the relevant addendum then return to the main appraisal document to continue. Before you know it you’ve carefully read and understood the appraisal. Say goodbye to confusion and welcome a clear understanding of your home appraisal!


Appraisal Cover Page

This page includes essential details such as the property address, the appraiser’s name and contact information and the date of the appraisal.

Table of Contents

Lists the sections and components of the appraisal report.

Letter of Transmittal

The letter of transmittal is a cover letter or introduction written by the appraiser to the client. It provides an overview of the appraisal’s purpose, important findings and the opinion of value. The letter may also specify any limitations or assumptions made during the appraisal process.

Subject Section

This section identifies the physical address of the property being appraised. The legal description and the assessor’s parcel number (APN). The legal description is a detailed written description of the property’s boundaries and location. It is based on the property’s official land survey and is used to legally identify and distinguish it from other properties. The legal description may include metes and bounds, lot numbers, and subdivision information. The APN is a unique identifier assigned to the property by the local tax assessor’s office.

Neighborhood Analysis

This section goes over the neighborhood’s property value trends, supply/demand, marketing time, boundaries and description.

Site Description

This section provides details about the size of the land, dimensions, zoning, topography and view.

Property Description

Here, you’ll find a detailed description of the property being appraised. This includes the property’s physical characteristics, such as the size, type of construction, age, updates, deferred maintenance and overall condition.

Comparable Sales Approach

The appraiser lists comparable properties (comps) that have recently sold in the area. They compare the subject property to these comps to determine its value. Adjustments are made to the comps to make them more similar to the subject property. The appraiser will detail these adjustments, which may include factors like size, condition, and amenities.

Cost Approach

If applicable, this section estimates the cost to rebuild the property from scratch, considering factors like land value and construction costs.

Income Approach

If the property is an income-generating property (e.g., rental property), the appraiser may use this approach to estimate its value based on its income potential.

Remember, it’s crucial to carefully read and understand all sections of the appraisal, including the addendum, to get a comprehensive grasp of the property’s valuation. If you have any questions or need further clarification, don’t hesitate to let us know.