The Anatomy of An Appraisal: Part 3 — “From Street View to Bird’s Eye View” How Appraisers Gather Data
In the previous ValuBlog installment of our Anatomy of an Appraisal series, we discussed the initial steps of defining the appraisal problem and setting the stage for valuation. Now, we turn to the crucial role of digital research in the early phase of an appraisal—before the appraiser ever steps foot on the property. This phase is all about gathering information: from property-specific facts to broader market context. By leveraging online tools and databases, appraisers arm themselves with data that guides their on-site inspection and overall analysis.
The Role of Digital Research in the Early Appraisal Phase
Before an appraiser heads out to inspect a property, they perform extensive digital research to compile as much relevant information as possible. Modern technology has made it standard (and often expected) for appraisers to collect data remotely using various online resources. In fact, with today’s tools, entire appraisals can sometimes be completed without leaving the computer. For example, a “desktop appraisal” is defined as an appraisal conducted remotely using market research, tax records, MLS data, and other digital resources to guide the valuation . Even for traditional appraisals that do include a physical inspection, this preliminary digital research is essential. It allows the appraiser to familiarize themselves with the property’s characteristics, the surrounding market area, and any potential issues (such as flood zone risks or zoning constraints) ahead of time. By doing their homework online first, appraisers can focus their field inspection on verifying information and observing nuances that digital data can’t capture.
This early data gathering phase lays the foundation for a credible appraisal. It ensures the appraiser isn’t “going in blind” – instead, they have context on the neighborhood, recent comparable sales, property history, and more. In short, digital research at the outset makes the appraisal process more efficient, thorough, and informed. It’s no surprise that industry leaders see the use of digital research tools as a key part of modernizing the appraisal process.
Specific Data vs. General Data: Why Both Matter
As they conduct their research, appraisers collect two broad categories of data: specific data and general data. Understanding the difference is important, because an accurate appraisal relies on using both types effectively.
Specific Data refers to details specific to the subject property and comparable properties. These are the concrete facts about the property’s characteristics and directly related information. For example, specific data includes the property’s size, layout, number of bedrooms and bathrooms, presence of a pool, age of the structure, recent improvements, etc. Essentially, it’s all the data that describes the property’s physical and legal attributes. Specific data extends to the comparable sales or rentals the appraiser will analyze as well – their features, sale prices, dates, and so on. This type of information has a direct impact on value, because it defines what is being valued . For instance, whether the home has a swimming pool or a finished basement will influence its market value, so those specifics must be gathered accurately.
General Data refers to broader forces and trends that affect value in the property’s community or market area. This data is not about the property itself, but about the environment in which the property exists. General data operates at the national, regional, city, or neighborhood level . It includes economic trends (like interest rates, employment growth, or housing supply and demand), demographic shifts, local government regulations (zoning, property taxes), and even cultural or environmental factors. General data provides context for the appraisal – it helps answer questions like: Is the local real estate market heating up or cooling down? Is the economy of the region growing? Are people moving into the area or out of it? These broader trends can significantly influence a property’s value. For example, when the city of Detroit experienced major job losses and population decline, home values plummeted as a result . That’s a dramatic illustration of general data (economic and population trends) impacting specific properties’ values. In most cases, the general data effects are more subtle, but still important – things like a new employer coming to town, a change in school district ratings, or rising construction costs will ripple into property values.
In practice, specific and general data work together. The appraiser uses general data to understand the market conditions and environment, ensuring that the specific property is evaluated in the proper context. Meanwhile, the specific data ensures the appraiser knows the unique attributes of the property and comparables that will drive the analysis. Ignoring either type would paint an incomplete picture. That’s why during the digital research phase, appraisers gather data on both fronts: they might pull detailed property records and recent sales (specific data) while also reviewing neighborhood statistics, economic reports, or city planning documents (general data).
Primary vs. Secondary Data Sources: Collecting Information
Another important distinction is between primary data and secondary data sources. In simple terms, this is about where the data comes from. Every piece of information an appraiser uses is either something they obtained firsthand (primary) or something that came from an existing source (secondary).
Primary Data is data an appraiser collects firsthand through their own direct efforts. This often happens during or after the inspection phase – for example, the appraiser’s measurements of the home’s dimensions, their photographs of the property, and their notes on its condition are primary data. Anything the appraiser observes or verifies personally – such as confirming the materials used in construction, or interviewing the homeowner for details – counts as primary data. In some cases, even the appraiser’s communication to obtain information can be considered primary (for instance, if the appraiser directly contacts a local planning office to confirm zoning, that information is freshly obtained). Primary data is original and usually specific to the assignment at hand.
Secondary Data is data the appraiser gathers from other sources that already exist. This encompasses a huge portion of the early research process, since appraisers typically start by collecting information from databases, public records, and published sources. Anything that the appraiser did not personally create but is leveraging for the appraisal is secondary data . Common examples include the local county’s tax records for the property, the Multiple Listing Service (MLS) data on the property (if it was listed for sale recently), prior sale deeds, maps, census reports, and so on. Even data provided by the property owner (such as architectural plans or an old appraisal report) would be secondary data, because it originated elsewhere.
During the digital research phase before inspection, virtually all data collected is secondary – the appraiser is pulling existing information from online resources. Later, when the appraiser conducts the site visit, they will add primary data to the mix (like noting the condition of the interior, or the view from the property). Both types are vital: secondary data gives the appraiser a baseline of facts and figures, and primary data provides confirmation and fills any gaps by direct observation. By the time the inspection happens, the appraiser will be well-prepared, with all readily available secondary (digital) information in hand, ready to be augmented by their primary findings on site.
Digital Tools and Sources for Data Gathering
So, what kinds of digital tools and sources do appraisers use to gather both specific and general data in this preliminary stage? Today’s appraisers have a rich array of online databases and software at their fingertips. Here are some of the most commonly used digital research sources and how they contribute to the appraisal:
Multiple Listing Service (MLS): The MLS is often the first stop. MLS databases contain detailed information on properties listed for sale in the area, as well as archives of past sales. An appraiser will search the MLS for the subject property (to see if it was listed recently, which can provide a wealth of details like photos, room counts, and amenities) and for comparable sales in the neighborhood. MLS data on comparable properties – including their listing descriptions, sale prices, days on market, and photos – is crucial comparative data for the appraisal. It helps the appraiser identify properties similar to the subject and see what they sold for, which will later feed into the analysis of value. The MLS information is considered reliable since it’s used by real estate professionals, but appraisers still verify critical details when possible. Digital MLS tools often allow map searches, filters, and even integration with other data (for example, some MLS systems integrate tax records or provide links to services like Realist, described below). By using the MLS, appraisers efficiently gather both specific data on the subject and comps and some general market data (like overall pricing trends, if the MLS provides market stats).
County Tax Records and Public Records: Every property has a trail of public records, many of which are now accessible online through county databases or integrated services. County tax assessor records usually provide the property’s legal description, lot size, the assessed value for tax purposes, property classification, and the owner’s name and mailing address. They may also show historical assessments and taxes, which can hint at value changes or improvements over time. Appraisers check these records to confirm details like the lot dimensions, square footage (if provided by the assessor), year built, and ownership history. In addition, records from the county clerk or recorder’s office (sometimes accessible via online portals) can show deeds, mortgages, liens, or easements on the property. All of this is important specific data that helps the appraiser understand the property’s legal and physical status. For instance, finding an easement or a recently recorded transfer can be very relevant. Accessing these records digitally saves time – in the past, one might have to visit the courthouse for the deed or the assessor’s office for the property card, but now much of it is a few clicks away.
Realist (Property Data Aggregator): Realist is a popular online tool (often integrated into MLS systems) that aggregates public record data and other property information into a user-friendly format. With Realist, an appraiser can pull up a subject property and see a lot of data in one place: ownership, sale history, tax assessments, parcel maps, and even neighborhood information. Realist also offers advanced mapping features, showing things like parcel boundaries, lot dimensions, and flood zone overlays for the property . In other words, it combines the power of public records with GIS mapping (more on GIS below) and market data. According to its documentation, Realist enables “more thorough analysis without leaving the MLS,” providing rich interactive maps for parcels, flood zones, demographics, and more . An appraiser using Realist can quickly glean not just the property specifics but also how the property sits in its environment (for example, seeing the shape of the lot, or noting if a neighboring property is vacant land). It’s a one-stop-shop for many pieces of data that otherwise would require visiting multiple websites.
GIS Maps and Mapping Tools: Geographic Information System (GIS) maps provided by local governments are another key resource. Many counties or cities have online GIS mapping portals where anyone can look up a property and view layers of information. These typically show the parcel boundaries over aerial imagery, and may allow the appraiser to measure distances or areas. GIS maps can reveal topography, flood zones, zoning districts, school districts, and proximity to features like highways or bodies of water. By examining GIS maps, an appraiser can answer questions like: Is the property on a corner lot? How close is it to that nearby lake? Is there a notable slope on the land? Which school zone is it in? This falls under specific data (location attributes of the site) but also ties into general data (neighborhood layout, district info). Additionally, basic tools like Google Maps, Google Earth, and Street View are invaluable: they allow a virtual “drive-by” of the property and surrounding streets. Street View can show the condition of neighboring homes or any commercial influences nearby, while Google Earth’s aerial view might show, say, that the property backs to a dense forest or a shopping center. All of this digital scouting helps the appraiser understand the property’s surroundings before visiting in person, so they know what to expect and can plan the inspection accordingly.
FEMA Flood Maps: Properties can be significantly affected by whether they are in a designated flood zone (which can require insurance and affect marketability). Appraisers therefore always research a property’s flood zone status as part of due diligence. The Federal Emergency Management Agency (FEMA) provides Flood Insurance Rate Maps online that identify flood hazard areas. An appraiser will check these maps (directly via FEMA’s website or through integrated services like Realist or other flood map tools) to see if the subject lies in a flood zone. A flood zone map helps an appraiser determine the level of flood risk associated with a property and what implications that has. For example, if a home is in a high-risk flood zone, the appraiser knows that the homeowner and any buyer would likely face higher insurance costs, and possibly building restrictions, which can influence the property’s value. Appraisal reports typically include a flood map exhibit for this reason. As one appraisal firm explains, incorporating the official FEMA flood map is a great way to ensure the appraiser and the client understand any flood dangers and insurance requirements for the property . In the digital research phase, appraisers obtain the flood zone designation (e.g., Zone X for minimal risk, or Zone AE for a 100-year floodplain, etc.) and note whether the property requires flood insurance. If a property is in a flood zone, the appraiser will be particularly attentive during inspection to any elevation certificates or mitigation features the owner might have.
Additional Online Resources: Beyond the major ones listed above, appraisers might tap into a variety of other digital sources depending on the assignment. Local government websites often provide access to zoning maps and ordinances (so the appraiser can verify the property’s zoning and permitted uses), building permit records (to see if any additions or renovations were officially recorded), and neighborhood plans or development proposals (which fall under general data about the area’s future). Demographic data tools or census statistics can offer insight into the neighborhood’s population trends, income levels, or other socio-economic factors, which sometimes play into the appraisal (especially in narrative reports or commercial appraisals where broader market analysis is needed). Real estate market reports from services like Zillow, Redfin, or local Realtor associations might be reviewed for general market temperature. And if the property is unique (say a historic home or a farm), the appraiser might even do targeted internet searches for any news or information on it or similar property types. In short, the digital toolbox is expansive – appraisers learn to navigate many data sources efficiently, ensuring they gather all information that the Scope of Work for the appraisal requires.
Analyzing the Subject’s Market Area with Digital Tools
A big part of an appraiser’s online research is analyzing the market area in which the subject property is located. The “market area” generally means the geographic area and market segment that directly influence the subject’s value – essentially, the pool of likely buyers and sellers for that type of property in that location. Using digital tools, appraisers can study the market area to understand trends and delineate boundaries without leaving their office.
One of the primary ways to analyze a market area is through the data on comparable sales (comps). By searching recent sales in the vicinity (via MLS or Realist maps), the appraiser observes the price range for similar properties, the speed of sales (days on market), and whether values seem to be rising or falling. Many MLS systems and aggregator tools provide market analytics that show, for example, the median sale price in the neighborhood over time, or the number of sales per month. These statistics help the appraiser gauge market momentum – are we in a seller’s market with rising prices, or a cooler market? If the digital data shows that, say, houses in the area have all been selling above asking price in a matter of weeks, that’s a sign of strong demand which might affect how the appraiser views the subject’s value potential.
Appraisers also segment the market during this analysis. Segmenting the market means identifying what sub-market or niche the subject belongs to. For instance, the appraiser might determine that the subject is in the “starter home” segment of the local market (maybe smaller homes suitable for first-time buyers), as opposed to the “luxury move-up home” segment. They do this by looking at characteristics and price levels of homes in the area. Digital research helps with segmentation: by filtering data, an appraiser can isolate sales of similar size/age homes and see that those form a cluster, separate from larger or newer homes that sell for different prices. Tools like map-based searches or Realist’s filters can target specific property criteria, effectively breaking down the market into relevant comparables. This is important because an appraiser doesn’t want to mix incomparable data – segmenting ensures they compare apples to apples. If the subject is a 1,500 sq. ft. ranch house, the appraiser will focus on that segment rather than the 3,000 sq. ft. two-stories in the same town, for example. Digital data makes it easier to spot these distinctions.
In addition, the appraiser anticipates the property’s likely use and value drivers while studying the market area. “Likely use” refers to how a typical buyer would most likely use the property – for a home, it’s usually owner-occupied residential use; for a vacant lot, it might be to build a certain type of building as allowed by zoning; for a commercial space, perhaps its best suited use (e.g., a retail store vs. office). By checking zoning (often via an online map or city code), the appraiser can confirm what the legally permitted uses are. Sometimes, digital research might reveal an alternative highest and best use – for example, a large older home in a commercial zone could be converted to offices. If such hints appear, the appraiser notes them and might later analyze feasibility.
Value drivers are the factors that are likely to have the biggest influence on what a buyer would pay for the property. Through market area analysis, an appraiser figures out what those drivers are for the subject’s market. Is it location (proximity to good schools or jobs)? Is it the size of the lot (maybe in an area where land is at a premium)? Is it something like waterfront access, a scenic view, or inclusion in a particular school district? Many of these can be assessed with digital tools: school district boundaries (check online maps), proximity to amenities (see Google Maps for distance to downtown or parks), environmental features (GIS maps for things like lakes, floodplains, or protected lands). For example, an appraiser might use an online school rating site or district map to note that the property is in one of the top-rated school districts – a value driver for many buyers that will be part of the appraiser’s analysis. Or they might notice via satellite images that the property has an unobstructed view of a mountain range, which in the market area is highly sought after. By understanding these value drivers early, the appraiser can seek out comparable sales with and without those features to determine how much they contribute to value.
In summary, digital analysis of the market area allows the appraiser to paint a picture of the context in which the property value exists. They combine general data (market trends, economic conditions) with specific market segmentation (comparable clusters and key features) to anticipate how the market will likely perceive the subject property. This preparatory analysis ensures that when it comes time to make valuation judgments, the appraiser is aligned with the realities of that market area.
Scope of Work and Data Gathering Requirements
At the outset of the appraisal, the appraiser and the client agree on the Scope of Work – essentially, what the appraisal will entail. The Scope of Work decision has a direct impact on what data needs to be gathered digitally in this early phase. According to the Uniform Standards of Professional Appraisal Practice (USPAP), Scope of Work is “the type and extent of research and analyses in an assignment.” In other words, the scope outlines how deep the appraiser needs to dig in terms of data and analysis to produce credible results for that specific assignment.
For example, consider a few different scenarios and how they affect the research:
If the appraisal is a simple mortgage lending appraisal for a single-family home, the scope of work might be fairly standard: a full inspection, and the development of at least the sales comparison approach to value. In preparation for that, the appraiser knows they’ll need to gather recent sales data of similar homes, the subject’s detailed property record, and some general market indicators. The tools and data we discussed (MLS comps, tax records, maps, etc.) will be focused on fulfilling that scope – primarily finding a solid set of comparable sales and understanding the neighborhood.
If the appraisal assignment is for a complex property or unusual purpose, the scope might be broader. Imagine a commercial property appraisal for an estate settlement: the appraiser may have to perform all three approaches to value (Cost, Sales Comparison, and Income). That expanded scope means additional data: they might need construction cost estimates (which could involve researching cost data from sources like Marshall & Swift), rental and expense data for similar properties (perhaps gathered from market reports or databases), and more extensive economic trend analysis since commercial values are tied closely to market rents and investor expectations. Before inspecting such a property, an appraiser would digitally gather zoning ordinances, market rent surveys, comparable sales of similar commercial buildings, income capitalization rates from published sources, etc. The scope essentially dictates a checklist of data to compile. If the scope also allows a desktop appraisal (no inspection) or a hybrid appraisal, that alters the data needs too – for a desktop, the appraiser might obtain more photographs or even third-party inspection reports to make up for not seeing the property firsthand.
The intended use and intended users of the appraisal also influence the scope and thus the data. An appraisal for pricing a property for sale (often a pre-listing appraisal) might focus on very current sales and listing data, because the user is interested in today’s market. An appraisal for tax appeal might require digging into assessment records and perhaps past sales of the subject property to build a case that the assessment is too high. Each case subtly changes what the appraiser looks for during research.
By defining the problem and the scope early on, the appraiser can target their digital research efficiently. They will “determine and perform the scope of work necessary to develop credible results” and part of that means collecting and analyzing all information about the subject property, the market, and comparable sales that are necessary for the assignment . Nothing important should be left out. If the scope calls for considering, say, the income approach, the appraiser knows to gather rental data ahead of time. If the scope is limited (for instance, a drive-by exterior-only appraisal), the appraiser might rely more on digital info like aerial images to substitute for interior details.
Ultimately, Scope of Work acts as a roadmap for data collection. It prevents the appraiser from doing too little (omitting key data) or too much irrelevant research. In the digital age, it’s easy to drown in information; a well-defined scope keeps the research focused on what will actually affect the valuation. The appraiser’s goal is always to have adequate, relevant data to support a credible value opinion, without unnecessary fluff. So, the scope decision made at the start directly shapes the digital data-gathering phase: it tells the appraiser what “homework” needs to be done before the on-site visit and subsequent analysis.
Segmenting the Market and Anticipating Use & Value Drivers
A sophisticated appraisal doesn’t just gather data – it interprets which data truly matter for this particular property. That’s where market segmentation and anticipating the property’s likely use and value drivers come into play, even at the research stage. We touched on market segmentation earlier in the context of analyzing the market area. To delve a bit deeper: segmenting the market means breaking down the broader real estate market into the specific subset that pertains to the subject property. Appraisers do this to ensure they compare the property only with others that would appeal to the same buyers or fulfill similar needs.
During the digital research phase, an appraiser might segment the market by using filters in their data search. For instance, they could filter for a certain price range, home size, or age range in MLS to see what the real competition for the subject looks like. If our subject property is likely to attract first-time buyers, the appraiser will be particularly interested in data on other starter homes in that area (and not, say, luxury estates). By segmenting early, the appraiser can anticipate what pool of comparables will be most relevant, and focus their attention on that segment’s dynamics. This ensures that when it’s time to do the formal analysis, the appraiser isn’t mixing data from different market segments which could skew the valuation.
Anticipating the property’s likely use is closely related. In appraisal, we think in terms of highest and best use – what use of the property will produce the highest value, which in many cases is the current use, but not always. Before visiting the site, an appraiser already considers likely use scenarios by examining zoning, neighborhood trends, and the property’s characteristics. For a typical owner-occupied house, the likely (and highest and best) use is its current use as a residence. But suppose the subject is a large old house on a busy street that’s increasingly converted to offices – the appraiser might anticipate that an alternative use (office conversion) could be a factor. Similarly, if a parcel is in a path of development, its likely use might shift in the near future (like farmland turning into a subdivision). The appraiser uses digital research (zoning maps, comprehensive land use plans, recent developments in the area gleaned from news or public records) to forecast whether the property’s current use is expected to continue or if changes are likely. This foresight will guide which comparables to use and what to highlight in the report.
Identifying value drivers ahead of time is another outcome of thorough research. Value drivers are essentially the features or circumstances that most strongly impact the property’s value in the eyes of buyers. By studying both the property and the market, an appraiser compiles a list of potential value drivers. Common residential value drivers include location factors (school district, convenience to employment centers, scenic views), property features (a new kitchen, energy-efficient design, a large lot), and market factors (scarcity of similar properties, low interest rates boosting buyer demand). Through digital data, an appraiser might see that homes in the subject’s neighborhood sell at a premium if they have, say, a water view or lake access – indicating that “lakefront” is a value driver. If the subject property happens to back to the lake, that’s a big positive; if it doesn’t, but many nearby do, the appraiser knows buyers might pay less for the subject lacking that feature.
On the flip side, the appraiser notes any detractors or risks that could drive value down – for instance, being in that FEMA flood zone we mentioned or being next to a noisy commercial site. All of this is identified via digital research: flood maps, GIS land-use maps, perhaps crime maps or traffic maps if those are concerns. By anticipating value drivers and detractors, the appraiser essentially forms a hypothesis of the property’s market position: what makes it attractive or less attractive? This hypothesis will be tested and refined with on-site observations and the comparative analysis, but having it in advance is invaluable. It allows the appraiser to seek out the right comps that illustrate those factors (for example, comps that also lack the lake view to fairly compare, or comps outside the flood zone vs. inside to see the value difference).
In sum, segmenting the market and forecasting likely use and value factors is like the appraiser putting on an analyst’s hat during the research phase. Rather than just compiling raw data, they are actively interpreting it to focus the appraisal on what truly matters for value. This thoughtful approach is a hallmark of a professional, credible appraisal. It means that by the time the appraiser arrives at the property inspection, they already have a framework in mind: they know what they’re looking for, what comparisons they’ll need to make, and what aspects of the property and market deserve the most attention.
Conclusion
Digital data gathering has revolutionized how real estate appraisers approach the early stages of an assignment. By conducting thorough online research before the inspection, appraisers ensure they have all the pieces of the puzzle on hand: the specific data about the property’s features and the general data about the market conditions, drawn from a mix of primary and secondary sources. Tools like MLS, public record databases, Realist, GIS maps, and FEMA flood maps empower appraisers to become mini-experts on the property and its environment within a short time frame, all from their desk. This not only makes the subsequent inspection more focused and effective, but it also underpins the credibility of the entire appraisal.
An appraiser who has done their digital homework can walk into the property inspection with informed eyes, already aware of what to verify and what might require further investigation. They can speak confidently about the market area and how the property fits into it. The Scope of Work determined at the start acts as a guiding light, ensuring the research is comprehensive but also relevant to the intended use of the appraisal. By segmenting the market and foreseeing the property’s likely use and key value drivers, the appraiser tailors their approach to capture the most important influences on value.
In a professional appraisal, nothing is left to guesswork. The digital research phase exemplifies this by leveraging data and technology to cover all bases early on. It’s an investment of time that pays off in a more accurate, supportable appraisal report. As we continue in our Anatomy of an Appraisal series, understanding this foundation helps illuminate why later steps – from the site inspection to the final valuation analysis – proceed as they do. In essence, a solid base of digital data is the bedrock of a solid appraisal. By being diligent and tech-savvy in gathering information, today’s appraisers carry on the industry’s tradition of meticulous fact-finding, now turbocharged by the digital tools at their disposal. The result is an appraisal process that is both comprehensive and efficient, ultimately leading to well-founded value conclusions that clients and users of appraisal services can rely on.
