If you're selling a home, or you're in the market to buy one, you're going to cross paths with a home appraiser. People also hire appraisers if they need to estimate taxes on an inherited home, or if they need to set a fair value on property that they intend to lease.

Whether you're the seller or the buyer, a home appraisal sets a market value on a piece of real property. It allows the seller to make an informed decision whether to invest some money in fixing up the home or listing the property as it is. It informs the buyer of all the property's characteristics-the things beyond the pretty surfaces. It includes:

* The size of the lot.
* Improvements to the lot, and interests or rights attached to it.
* The size of the house and each of its rooms.
* What material the house is made from, including a description of the exterior and foundation.
* When it was built.
* Each room's floor and wall coverings.
* Descriptions of the heating system, including air conditioning if applicable.
* Description of the electrical system.
* Description of the plumbing system.
* Description of kitchen appliances or other items such as water softener.
* Description of the garage, basement, and attic, if applicable.

The appraiser begins by walking around the property pretty much the same way you would. Even if you tell him the size of the lot, he still checks it himself. He evaluates the availability of real estate property in the area, improvements on the lot as well as on adjacent lots, the permanence of any investments made, and how popular the location is.

Inside the home, he is especially trained to look for signs that other experts should be brought in. For example, an old breaker box might indicate the need for an electrician. If the area has recently been hit by storms, tornadoes, fires, flooding, or the like, he looks for disaster-specific damage.

He also evaluates real estate activity in the area. Typically, he averages several recent sales of similar homes to obtain an estimated market value. If homes in the area are not selling, he investigates to determine whether this home is similar to those. Any new construction in the area can impact the home's value.

The appraiser chosen should be licensed, if this is required in your state, and accredited. The appraiser should also be someone familiar with your geographic area. You can check the website of the American Society of Appraisers for a directory of accredited appraisers in your area.

You can hire an appraiser whether you are the buyer or the seller, but for purposes of real estate lending, federal regulations stipulate that the appraiser is hired by the lender. That means if you are the seller you can hire an appraiser, but the final say comes from the lender's appraiser. The cost is borne by the buyer and is paid at the closing.

If an appraisal has been done by one lender and the mortgage is ultimately serviced by another lender, the original appraisal can be transferred as long as the first lender found it acceptable.