What is an appraisal?

For years, Mortgage lenders and consumers, as well as other real estate professionals, have called upon Glen Graham & Associates to provide high-quality appraisals on all types of residential real estate in Comal County, Bexar County, Hays County, Austin County, and Guadalupe County.  Our extensive experience ranges from the most urban areas to rural homes on acreage.  By continuously keeping up with local real estate trends in this region and staying current on valuation techniques through accredited courses, we’ve been consistently able to produce reliable home valuations for our clients.

Technology plays an important part in how Glen Graham & Associates does business.  It helps keep fees low while simultaneously achieving superb quality and responsive service.  Combined with sound judgment and techniques developed over more than 30 years’ experience help us to stand above the rest.  We provide professional customer service and you’ll be extended the utmost courtesy in all aspects of working and communicating with Glen Graham & Associates.  Finally, what it comes down to is the best possible experience for our customers.  See the difference for yourself.  Call us today.

A home purchase is the largest, single investment most people will ever make.  Whether it’s a primary residence, a second vacation home or an investment, the purchase of real property is a complex financial transaction that requires multiple parties to pull it all off.

Most of the people involved are very familiar.  The Realtor is the most common face of the transaction.  The mortgage company provides the financial capital necessary to fund the transaction.  The title company ensures that all aspects of the transaction are completed and that a clear title passes from the seller to the buyer.

This is where the appraisal comes in.  An appraisal is an unbiased estimate of what a buyer might expect to pay – or a seller receives – for a parcel of real estate, where both buyer and seller are informed parties. To be an informed party, most people turn to a licensed, certified, professional appraiser to provide them with the most accurate estimate of the true value of their property.


So what goes into a real estate appraisal?  It all starts with the viewing of the property by the appraiser.  The appraiser’s duty is to view the property through the eyes of the typical purchaser to ascertain the true status of that property.  He or she must actually see features, such as the number of bedrooms, bathrooms, the location, and so on, to ensure that they really exist and are in the condition and have the functional utility that a reasonable buyer would expect.  The viewing often includes a sketch of the property (see example), calculating the gross living area and conveying the layout of the home.  Most importantly, the appraiser looks for any obvious features or defects that would affect the value of the home.

Once the property has been viewed, an appraiser considers three approaches in determining the value of real property: a cost approach, a sales comparison analysis and , in the case of rental property, an income approach.


The cost approach is the easiest to understand.  The appraiser uses information on locat building costs, labor rates and other factors to determine how much it would cost to construct a property similar to the one being appraised.  This value often sets the upper limit on what a property would sell for.  The theory being, “Why would you pay more for an existing property if you could spend less and build a brand new home instead?”


Appraisers often rely primarily on the sales comparison approach to value residential properties.  Appraisers are experts in the areas in which they work and understand the market value of home features and how they impact price.  They are aware of traffic patterns, schools, locational influences and use this information to determine which attributes of a property will impact value.  Then the appraiser researches recent sales in the same vicinity and finds properties which are comparable to the property being appraised.  The sale prices of these properties are used as a basis to begin the sale comparison approach.

Applying knowledge of the value of certain items such as gross living area, room count, finish items such as flooring or location (just to name a few), the appraiser adjusts for measurable differences between the property being appraised and the comparable properties that have sold recently.  In this method a range of value is developed.

In the case of income producing properties, – rental houses for example – the appraiser may use a third approach to valuing the property.  In this case, the amount of income the property produces is used to arrive at the current value of those revenues over the foreseeable future.


Combining information for all approaches, the appraiser is then ready to determine an estimated market value for the subject property.  It is important to note that while this opinion is probably the best indication of what a property is worth, it may not be the final sales price.  There are always mitigating factors such as seller motivation, urgency or other factors that may impact the final price.