No two properties are completely alike, and it's up to appraisers to attach a number value to a property. While prevailing market prices are a major factor in determining a value, a seasoned appraiser will take a nuanced approach in assessing many different factors that paint a clearer picture of what the property should sell for.
- Location Proximity - The value of a place is largely determined by how close it is to other places. Properties that are near bus stops and major highways add to a valuation. Appraisers also consider proximity to schools, churches, shopping centers, medical facilities, beaches, and downtown areas. Life is short, and cutting down a few minutes on a daily commute can and should be very attractive to prospective buyers.
- Neighborhood - In the same vein as location, analysis is given to the surrounding neighborhood. All neighborhood factors are considered, from the crime rate to noise levels to any unusual smells. Who the neighbors are and how they maintain their land makes a difference. Richard L. Borges II, the President of the Appraisal Institute says that "Neighborhood nuisances like an overgrown yard or persistent odor could in some cases bring down the value of adjacent homes by 5 to 10 percent." It helps the valuation if the neighborhood has a homeowner's association that maintains the quality of the neighborhood.
- Condition - Naturally, if a property is one gust of wind away from a pile of rubble it won't go unnoticed by an appraiser. However there are other factors to consider, like peeling paint and outdated light fixtures. Homes and buildings that may look bad might be considered to have renovation potential, or target them for demolition.
- Comparables - Comparables are an appraiser's best friend, by helping establish a tested baseline to measure an appraisal against. Nearby, recent transactions affect the valuation of a property. If a property in similar size, condition, and in the same location sells for a low price it inevitably lowers the appraisal value of the current property.
- Timing - Timing is often an underestimated factor when it comes to valuation. Buyers generally tend to avoid major holidays while March to August is typically the most active time of the year. So a property for sale in late November would be considered less valuable. Another timing factor is simply the number of comparable properties on the market at the same time. If there are many such properties, the comparable with the lowest price usually sells first.