Appraisals don't have to be the mystery they often appear to be to the average
Maryland or Virginia home buyers or sellers.

Most of the time, the appraisal is ordered by the home buyer's lender based on an accepted Contract of Sale. The appraiser's job, is to help the lender determine if the lender is sufficiently protected by their lien on the property in
the case of a buyer defaulting on the mortgage and the lender having to foreclose.

The appraiser does substantially everything a real estate listing agent would do when preparing a Comparative Market Analysis to assist a seller in pricing a home for sale except that the appraiser has completed hundreds of hours of
training, conducted hundreds of appraisals in order to provide his/her services to lenders or home buyers or sellers. Further, since the appraiser is not seeking to list the home for sale, the appraiser can be objective in arriving at a

The appraiser will select several, usually 3 or 4 homes in the same area as the subject home and, through a series of adjustments, assign value to various components of the property, lot size, style, age, square feet finished, square feet unfinished, garage spaces, bedrooms, full baths, half baths, fireplace(s) and other features that would distinguish the subject home from others that have sold and settled in the previous six months, arrive at a value for the


Subject Property   Comparative #1 Comparative #2
Lot Size
Sq. Ft. Fin.
Garage Sp.
Days on Market
Price List
123 Maryland Ave
11,100 sq. ft
42 years
  345 Maryland Ave
12,400 sq. ft
37 years
678 Maryland Ave
9,300 sq. ft
2 Story
47 years

Based on the information above, the appraiser will probably value the subject property the contract price since the homes are similar in size, lot size and finished square feet. The two car garage and time since the last properties sold would suggest that the seller, with advice from his/her listing agent have priced the home to sell within the range of recent SOLD properties.

If a home is priced significantly higher than similar homes in the area, it may be priced for the future. Or, in a very fast moving market, such as that often found in Maryland and Northern Virginia, the seller would expect that the buyers will be willing to pay cash over appraised value if the appraisal is lower than the contract price. On the other hand, if a home is priced significantly lower than area comparable homes, it is probably a very good buy and priced to sell quickly.

Appraisals are much more complicated than the example above, but, the purpose of the appraisal, to verify to the lender that the home has value that will protect the lender's investment is sound.