Residential appraising is one of the most crucial aspects to buying or selling a home. Real estate appraisals offer critical information with regards to the value and price of a home and its worth on the current real estate market. For both buyers and sellers, residential appraisals are a must.

A real estate appraisal is used to establish the market value of a home and its property, that is, its estimated value in an open market. Lenders also require appraisals when homebuyers use homes as security for loans. Overall, appraisals are a vital part of the real estate buying and selling process for all parties involved.

Residential real estate appraisals differ from comparative market analysis, or CMAs, on several different aspects. A comparative market analysis, while similar to an appraisal, is less detailed but intended to help sellers determine a reasonable asking price. While the two are often close in value, it is important to remember that both are very different in the end.

Residential appraisals are performed by licensed real estate professionals. All appraisers are objective third-party individuals who have no financial connection to the property being appraised. Appraisal reports are very detailed and include a number of important pieces of information such as an evaluation of the local real estate market, the estimated sales time, details about the property and the appraiser’s general view of the property’s value on the current real estate market. Overall, the report is intended as a guideline of sorts to help all parties involved with the buying or selling of the property.

Residential appraisals can be done in either the cost approach, which estimates the cost of the property, and the sales comparison approach, which compares the property to the value of others in the region. Both approaches are useful for certain types of homes and markets.

Overall, residential appraisals are a vital component to real estate sales. Whether you’re looking to buy or sell, a thorough home appraisal is absolutely crucial, no matter what your local real estate market looks like.