An appraisal is an opinion of value that is completed by a professional appraiser who randomly assigned by the appraisal management company chosen by the lender.

The appraiser visits and inspects the size, condition, function and quality of the home. There are a few steps in the process. First, a licensed appraiser comes to the property and inspects the home. Next, the appraiser will research similar homes in the area and compare recent sales to determine a fair market value. The appraiser will then give a final appraisal report with all the data and research to issue a final "opinion of value."

A property's appraisal value is influenced by recent sales of similar properties and by current market trends. The home's amenities, number of bedrooms and bathrooms, floor plan functionality and square footage are also key factors in assessing the home's value. The appraiser must do a complete visual inspection of the interior and exterior and note any conditions that adversely affect the property's value, such as needed repairs.

Typically, the appraisers describe the interior and exterior of the property, the neighborhood and nearby comparable sales, the report must include a street map showing the appraised property and comparable sales used; an exterior building sketch; an explanation of how the square footage was calculated; photographs of the home's front, back and street scene; front exterior photographs of each comparable property used. The appraiser then provides an analysis and conclusions about the property's value based on his or her observations.

Short appraisals typically arise in a declining housing market because the lack of recent comparable area homes sales, or "comps," making it difficult for appraisers to determine the current market value of a property. When home sales slow, good comps "age" fast. Add foreclosures and short sales to the mix and appraisals can run all over the map.

Other than the common sense things like making sure your home is clean and tidy and presentable to make a good impression on the appraiser, pointing out the recent renovations you have made, there are a few things that could cost you money: per the guidelines there are few common requirements that if you do not have a completion report needs to be ordered which could cost you couple of hundred dollars in order for the appraiser to go back in to your home and re-inspect. The most common ones are: having smoke detectors and carbon monoxide detectors, water heater being double strapped and if you have safety bars making sure there are safety latches.