Standards National standards dictate the content, format and methodology of residential appraisals and most lenders follow these requirements. The FHA and VA also require that certain additional information be included for their appraisals. Credentials National standards govern more than the written format of the appraisal reports. They also describe the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers who want to evaluate properties located within their states.
Most lenders work only with appraisers whose valuations they know and trust.
The appraiser uses experience and judgement to reconcile these differences and arrive at a final appraised value. The market value approach is the single most important method, because a property is worth only what a buyer is willing to pay and a seller is willing to accept. Market values are based on the actual selling prices of nearby similar homes that have typically sold within the past six months. Includes population density, price stability, availability of public amenities and nearby land use. The appraiser must also make note of obvious structural problems such as termite damage, dry rot or leaking roofs.