The Importance of Previous Purchases to Appraisers

How much weight do appraisers put toward previous purchases when completing a home
appraisal? Often times, looking at the past can help us understand the present. It’s
important to consider the factors that impact a previous purchase in the ever-changing
market of real estate.

An appraiser is required to analyze and report the past 36 months of transfers of the subject
property. Analysis of a prior sale can be normal and even mandatory in the appraisal

If a property sold at a reasonable price, an appraiser could give strong weight to that sale. In
this scenario, an appraiser will take a closer look at exactly how the market and property
have changed since the sale.

On the other hand, a previous purchase could be considered meaningless if a property sold
for too little or too much in the past. In this case, an appraiser will not give real value weight
to this type of purchase.Outside of two-story home

When the Previous Purchase Means Less

Trustees Sale

This type of sale tends to go for a discount. Properties are typically not in great condition in
this scenario.


If a home was in need of significant work, it most likely sold at a lower price. Chances are,
the home received major upgrades since the previous purchase. In this case, the previous
purchase value means less.

Family Discount

If a home was sold between family members, it is likely the previous purchase price will not
be a reliable source of information for today’s market. These types of sales often include a
discount to the actual value.Living room and kitchen of home

Factors to Consider


Before giving weight to a previous sale, an appraiser will assess whether it was a reasonable
representation of value at the time.


Often times, a previous purchase is an incredible way to understand how a property fits into
the market. If a subject property has competed at approximately the same price position
within the previous three sales, an appraiser will likely give strong weight to those previous
sales. This helps one understand value for that particular property.


A prior sale can help determine how much the value should adjust for certain features of
the property. Is the home located on a busy street? A previous sale gives insight into
whether this was a big deal or not compared to surrounding neighborhood sales. This
research is effective insight into seeing what buyers have been previously willing to pay for.

Current Market

An appraiser will be objective by giving the most weight to the current market. You should
not get stuck on the previous purchase price and forget about the current market. Values
could have increased or softened since that previous purchase. The market could be
different today due to things such as:

  • Change in zoning
  • Change in buyer demand
  • Gentrification

No matter the previous purchase price, it is important to compare that to today’s market.

Previous purchases help appraisers to uncover how any recent improvements or changes
impact the overall value of the property. However, no matter the history of the property,
it’s important to consider all factors that impact the overall value in the ever-changing
market of real estate.


Definitive Valuations is North Alabama’s premiere appraisal firm. Our mission is to provide
superior valuation and consulting services in Huntsville, Alabama, and surrounding areas.
Our staff strives to understand your needs and to provide the best solution for your
situation – whether for financial planning, relocation, tax dispute, legal matters, pre-listing,
or any other purposes. Discover more here.

12 Factors to Consider for Your Next Home Appraisal

There are several factors that may impact your home appraisal value. The main purpose of
an appraisal report is to give a value opinion. Each factor within an appraisal report has its
own impact on the final value of the property. A home appraisal is crucial to place your
home on the market fairly, based on a comparable set of standards and the surrounding
Check out these 12 factors that can influence your home appraisal value.


One of the factors taken into consideration when valuing a home is its location. The location
includes not just the neighborhood your home is in, but where it is positioned within the
neighborhood. A larger lot in the back of the neighborhood may (or may not) be worth more
than a corner lot parallel to the main road.
A neighborhood’s value is based on factors including proximity to schools and hospitals, the
rating of nearby school systems, and surrounding amenities such as parks and shopping

Overhead view of neighborhood

Structural Materials and Updates

Another factor taken into consideration when determining appraised value is the materials
used to build your home and/or recent updating completed. The value may increase if your
home was built more recently with modern materials. The appraiser also considers updates
that have been made to items such as the roof, siding, or windows. These things improve
the overall efficiency and safety of the structure of your home, but are often be considered
maintenance items. (You wouldn’t consider purchasing a home with no roof would you?)
However, there are other updates that can be made to make a home more appealing to the
current market, such as remodeling kitchens and bathrooms, replacing floor covering, and
fresh paint.


A newer home doesn’t always appraise higher than an older home. There are pros and cons
to older and newer homes. New homes, built within the last 10-20 years, are less likely to
have major issues and are lower risk to buy. This may increase the home’s appraised value.
On the other hand, in some markets, older homes located in historic districts may demand
higher prices in the market.

Design Style

A home appraisal also takes into consideration the overall design of the home. In some
markets (but not all), design differences can mean differences in values when all other
things are equal.

Curb Appeal

Curb appeal and general landscaping of the home may also impact a home’s value. Although
it may/may not be possible for an appraiser to make a specific dollar amount adjustment for
your nicely landscaped yard, it is taken into consideration in the overall condition and
quality of your home. Consider an easy-to-care-for layout and clean landscape design to
appeal to most buyers.

Front of house

Number of Rooms

The number of bedrooms and bathrooms in your home may also impact the overall value of
the home. A home appraiser will compare your home to others in the area with the same,
or similar, number of bedrooms and bathrooms to make a value comparison.

Real Estate Market

The current status of the local real estate market has a great impact on the final appraisal
value of your home. If the market is saturated with buyers but there aren’t enough sellers,
home values will typically be on an upswing. On the other hand, an appraised value is
expected to be lower in the middle of a market that is saturated with many homes and
fewer buyers.

Recent Renovations

Recently renovated homes, especially those with upgraded kitchens and bathrooms, have a
major impact on the appraisal value of homes. Renovating these areas before putting your
home on the market is a great idea and can help realize a high return on investment. But, be
careful not to “over-improve” your home. Get advice from someone who knows your
neighborhood and what buyers expect. You may not want to put in that gourmet kitchen if you won’t get a return on your investment should you need to sell, because buyers aren’t
looking for that in your neighborhood.


An appraiser considers various factors when assessing a home’s garage (or lack thereof). This

  • If a garage exists
  • How many cars can fit

In general, where a home buyer is able to park their cars will influence the appraisal value.

Storage SpaceCloset storage space

A home with ample storage space such as closets, a basement, or a large attic is typically noticed by appraisers and may or may not impact value. Many home buyers are looking to upsize their home, including their storage space. Appraisers can consider this factor when determining a home’s value.


Heat & Air

The type of heat and air your home has is a factor in your home appraisal value. Central air
and heating results in a higher appraisal value than homes that require individual units in
each room. Outdated systems will also lower the appraisal value of your home.

Square Footage

Appraisers observe the square footage of homes. Once the total square feet number is
determined, an appraiser considers how the space is distributed throughout the home.
Appraisers will consider things such as:

  • How much square footage is useable
  • How much square footage is live-able space
  • How many stories your home has

Consider this list of factors prior to having your home appraised, in order to get the most
value. Additionally, consider strategically placing your home for sale during a time when the
market is filled with buyers. Check out the various things included in a Definitive Homes appraisal report here.


Definitive Valuations is North Alabama’s premiere appraisal firm. Our mission is to provide superior valuation and consulting services in Huntsville, Alabama, and surrounding areas. Our staff strives to understand your needs and to provide the best solution for your situation – whether for financial planning, relocation, tax dispute, legal matters, pre-listing, or any other purposes. Discover more here.

Difference Between Appraisals and Inspections

Differences Between a Home Appraisal and a Home Inspection

Home appraisals and home inspections are two very different things, but both are necessary in the home buying or selling process. Each of them are evaluating the home from two different perspectives. Additionally, the two are very different processes requiring separate skill sets and expertise.

What is an Appraisal?

The home appraisal is a form of evaluation in which the appraiser gives an opinion of the value of the property being considered. As an appraiser formulates an opinion of the value of your home, he or she will take the following into consideration during the process:

  • Location
  • Size and type of Lot
  • Overall Quality of Construction
  • Overall Condition
  • Prices of Comparable Properties

An appraiser isn’t interested in whether a house is clean, but he or she will notice signs of neglect, such as cracked walls or chipped paint. There are three types of approaches which guide the appraiser to build the valuation of the property.

Cost Approach

The cost approach is one approach that appraisers may consider while determining value, although it is important to note that cost does not necessarily equal value in the world of appraisal. Cost may be greater than, equal to, or less than the contributing value of that item/feature to the whole value of the property. The cost approach involves discerning what the improvements would cost minus physical depreciation, plus the land value.

Sales Comparison Approach

In the sales comparison approach, the appraiser carries out a detailed analysis of comparable sales within the subject’s defined market area. Preferably these properties will be located within close proximity to the property being appraised and will be reflective of the most recent sales. Although for specialty properties, an appraiser may be required to search further in distance and time to find something truly “comparable” to the property being appraised. This approach is the most accurate and clearest indicator of a likely sales price for a home since realtors in the market also look at other home sales in the market when assisting potential buyers and sellers in real estate transactions.

Income ApproachWoman holding clipboard making notes

Lastly, the income approach is another option appraisers can rely on and is most valuable when appraising income producing properties (rental properties). This method involves estimating what an investor would pay based on the money produced by the property.

What is a Home Inspection?

A home inspection is an objective visual examination of the physical structure of a house, from its roof to the foundation. The home inspection involves comprehensive analysis of the structure, amenities, and other items to include:

  • HVAC Systems
  • Interior Electrical Systems
  • Sanitation / Plumbing
  • Roofing
  • Chimneys
  • Visible Insulation
  • Walls, Ceilings, Floors, Windows, and Doors

A home inspector will educate the buyer or seller on the condition of the home and its major components. The inspector also takes note of the cleanliness and physical condition of the house, looking for things such as cracks in the walls, broken windows, chipped paint, damaged floors, torn carpet, or damaged appliances.

Man unlocking door to house

The Differences

A home inspection will always involve a professional visiting a property and conducting a physical exam. Often an appraisal will often involve a visit to the property by a professional appraiser. However, it is important to note that an appraiser may also be able to give an opinion of value without visiting the property at all as long as enough information is available to make some assumptions and complete the assignment. Additionally, both home inspections and appraisals will often occur prior to the closing of the sale of a home and will result in a report regarding the property’s state, functionality, and integrity. Both are also meant to be unbiased looks at the piece of real estate. However, the two also have big differences, as they both complete different tasks.

Ultimate Goal

A real estate appraiser’s key job is to provide their opinion of the value of the home to the lender, buyer, and/or seller. On the other hand, a home inspector guides the buyer about the physical components and the detailed condition of the home.


A home inspectors inspection can last two to three hours, while an average appraisal inspection involves a simple walk-through. The appraiser’s job is not finished and did not start at the property inspection, but involves detailed research, analysis, and reporting of the market activity and sales in the area and how they compare to the property being appraised.


An inspection assesses the physical components of a home. An appraisal considers a multitude of features of the home including: the location of the home, the school district the home is zoned for, the size of the home, its overall quality and its overall condition.

Both appraisals and inspections are important in protecting a real estate investment. An inspection can safeguard you from making any costly mistakes, such as purchasing a home with a faulty foundation. An appraisal gives you an unbiased, accurate value of the property. Be sure to have both processes taken care of before making any next steps in buying or selling property.

Definitive Valuations is North Alabama’s premiere appraisal firm. Our mission is to provide superior valuation and consulting services in Huntsville, Alabama, and surrounding areas. Our staff strives to understand your needs and to provide the best solution for your situation – whether for financial planning, relocation, tax dispute, legal matters, pre-listing, or any other purposes. Discover more here.