What is Bracketing in Real Estate Appraisals?

I love explaining appraisal concepts that make a real difference in property valuations. Bracketing might sound technical, but it's actually a straightforward and practical approach that appraisers use every day to determine accurate property values. Think of it like finding the right price for your house by looking at similar homes that sold for both more and less than what you think yours is worth.

Bracketing: The process of selecting comparable property sales that include both higher and lower values than the subject property being appraised. This technique helps establish a reasonable value range by ensuring the subject property falls between the selected comparables.

Understanding How Bracketing Works

The process is similar to finding the right size shirt - you wouldn't try on just small sizes or just large sizes. You'd try both to find your perfect fit. In real estate, appraisers select properties that sold for more than your property and properties that sold for less. This creates a value range where your property naturally fits.

For example, if your home has 2,000 square feet, an appraiser might look at similar homes between 1,800 and 2,200 square feet that recently sold. Some will have higher values (maybe they have a pool), while others will have lower values (perhaps they need updating).

Benefits of Bracketing

I've found that bracketing makes property valuations more reliable. It reduces the risk of over- or under-valuing properties by creating clear boundaries. Think about it - if all the comparable properties were valued higher than yours, how would anyone know the true bottom range of your property's value?

This method also builds trust with lenders, buyers, and sellers. When people see that an appraiser has considered properties from both value perspectives, they're more likely to accept the final valuation as fair and accurate.

Common Applications

Bracketing shows up everywhere in real estate valuation:

• Single-family home appraisals

• Commercial property assessments

• Bank lending decisions

• Investment property analysis

Best Practices for Effective Bracketing

Good bracketing requires careful attention to:

• Location - properties within the same neighborhood or market area

• Physical features - similar size, condition, and amenities

• Recent sales - typically within the past 3-6 months

Making adjustments is part of the process. If a comparable property has an extra bathroom, the appraiser adjusts its value down to match your property. If it lacks central air that your property has, the value gets adjusted up.

Common Challenges and Solutions

Sometimes finding perfect brackets isn't possible. Maybe your property is unique, or the market doesn't have many recent sales. In these cases, appraisers might need to:

• Look at a wider geographic area

• Consider older sales

• Use properties with different features and make larger adjustments

Relationship to Other Appraisal Methods

Bracketing strengthens the sales comparison approach by providing clear value boundaries. It works alongside other valuation methods, supporting market analysis and helping validate conclusions from different approaches.

Misconceptions About Bracketing

People sometimes think bracketing means simply picking the highest and lowest sales in an area - that's not correct. The comparables still need to be truly similar to your property. It's about finding appropriate matches that happen to fall on both sides of your property's likely value.

The Future of Bracketing

New technology makes finding appropriate comparable properties easier than ever. Digital tools help appraisers analyze more data points and find better matches. But the fundamental principle remains the same: establishing reasonable value ranges through careful comparison.

Taking Action

Professional appraisals using proper bracketing techniques protect everyone involved in real estate transactions. Bellhaven Real Estate provides expert property valuation services that follow these proven methods. Our team uses bracketing and other professional techniques to deliver accurate, defendable property valuations.