What are the components of an appraisal?

A home purchase can be the biggest investment most people will ever encounter. Whether it's where you raise your family, a second vacation property or an investment, the purchase of real property is a complex transaction that requires multiple parties to pull it all off.

To learn more about appraising, call us today to talk about your specific property.


We provide an unbiased estimate of the residence by researching the market for recent sales and active listings.  We find similar residences to your residence and adjust for differentials.  We take our time to make sure that we are providing a fair market value.  A professional Indiana licensed appraiser from Heartland Appraisal Services will ensure you as an interested party are informed.

Inspecting the subject property

To ascertain an accurate status of the property, it's our responsibility to first conduct a thorough inspection. We must see aspects of the property hands on, such as the number of bedrooms and bathrooms, the location, living areas, etc., to ensure they really are present and are in the shape a typical person would expect them to be. To make sure the stated square footage is accurate and illustrate the layout of the house, the inspection often entails creating a sketch of the floor plan. Most importantly, we look for any obvious amenities - or defects - that would have an impact on the value of the property.

Following the inspection, an appraiser employs the Sale Comparison Approach when determining the value of the property, a paired sales analysis.  There are two other approaches that may be provided if the appraiser feels it will be relevant:  a replacement cost calculation, and an income approach when rental properties are prevalent.

Appraisers become very familiar with the neighborhoods in which they work. We innately understand the value of particular features to the people of that area. Then, the appraiser looks up recent transactions in close proximity to the subject and finds properties which are 'comparable' to the subject being appraised. Using knowledge of the value of certain items such as fireplaces, room layout, appliance upgrades, additional bathrooms or bedrooms, or quality of construction, we adjust the comparable properties so that they more accurately portray the features of subject.

  • For example, if the comparable has an extra half bath that the subject does not, the appraiser may deduct the value of that half bath from the sales price of the comparable.
  • In the case where the subject has something such as an extra half bath that a comparable doesn't have, the appraiser might add the value of that bath to the comparable property.
At Heartland Appraisal Services, we are an authority when it comes to knowing the value of particular items and have extensive research in our covered areas.. The sales comparison approach to value is most often given the most importance and provides the best approach to a value estimate for divorce, estate, and mortgage purposes.

Replacement Cost
​Here, the appraiser gathers information on local construction costs, labor rates and other factors to figure out how much it would cost to replace the property being appraised.  This estimate often sets the upper limit on what a property would sell for.  It's also the least used method.

Valuation Using the Income Approach

A third way of valuing a property is sometimes applied when an area has a reasonable number of rental properties. In this scenario, the amount of revenue the property produces is factored in with other rents in the area for comparable properties to give an indicator of the current value.

Putting It All Together

Analyzing the data from all applicable approaches, the appraiser is then ready to state an estimated market value for the property in question. It is important to note that the appraised value is the most reliable indication of what a house would sell for in an open market, but is not a guarantee. There are always mitigating factors such as the seller's desire, urgency, emotion, or 'bidding wars' that may adjust the final price up or down. But the appraised value is typically used as a guideline for fair market value. It all comes down to this: An appraiser from Heartland Appraisal Services will guarantee you discover the most fair and balanced property value, so you can make wise real estate decisions. We also know that divorce appraisals and estate appraisals require a delicate touch, and we are here to provide the best customer service around.