What is an Appraisal? - JLS Valuations, LLC, DFW Metroplex

Comprehending Appraisals
Buying a home is often one of the most significant investments people make. Whether it’s a family home, a vacation retreat, or a rental property, the purchasing process involves multiple parties working together.

The key participants in this process include:

Real Estate Agents: They guide you through the market and help with negotiations.
Mortgage Companies: They provide the financing necessary for the purchase.
Title Companies: They ensure all aspects of the sale are completed and that a clear title is transferred.

But who ensures that the property is worth the amount being paid? That’s where the appraiser comes in. At JLS Valuations, LLC, our licensed and certified appraisers provide an unbiased assessment of property value, ensuring that all parties are informed and confident in the transaction.

Inspecting the Property
To accurately determine a property’s value, we start with a thorough inspection. This includes evaluating key features such as the number of bedrooms and bathrooms, location, and overall condition. We create a sketch to verify square footage and illustrate the layout, identifying both notable features and any defects that may impact value.

Replacement Cost
We assess local construction costs and other relevant factors to estimate how much it would cost to replace the property. This figure typically sets the upper limit of what the property could sell for, though it's less frequently used compared to other methods.

Analyzing Comparable Sales
Our appraisers have in-depth knowledge of local neighborhoods, allowing us to research recent sales of similar properties, or "comparables." By adjusting the sale prices of these properties based on specific features—such as square footage, additional bathrooms, and other amenities—we arrive at a more accurate estimate of the subject property’s value.

For example, if a comparable property has a fireplace that the subject property lacks, we deduct its value from the comparable's sales price. Conversely, if the subject property has an extra half bath, we add its value to the comparable's price.

Valuation Using the Income Approach
For income-producing properties, such as rental homes, we assess the property’s revenue alongside similar properties' income. This comparison provides an indication of the property’s current value based on its income potential.

Arriving at a Value Conclusion
After analyzing data from all valuation approaches, we determine an estimated market value for the property. While this appraised value is typically the most accurate reflection of worth, it may not always align with the final closing price, which can be influenced by factors like seller motivation or competitive bidding.

However, the appraised value serves as a crucial guideline for lenders, ensuring they finance only what the property is genuinely worth. At JLS Valuations, LLC, we pride ourselves on providing the most accurate property valuations, empowering you to make informed real estate decisions.

For more information about the appraisal process or to discuss your specific property, call us today!