The Art of Home Appraisals

The Art of HOME APPRAISALS Finding your dream home, believe it or not, can be the easy part. Actually getting from the sellers accepting your offer to receiving the keys to your new home can be quite an ordeal with all the hoops you have to jump through. Often something goes awry and more often than not that is the appraisal. So what exactly is an APPRAISAL? $$S Simply put, an appraisal is a valuation of the property you want to purchase. WHY DO WE need appraisals? You need one because Lenders want to lenders generally require it if ensure that the you are using the home as property is worth at collateral for the loan. least as much as it fits the lending guidelines. WHO DOES the appraisal? An independent third party carries out appraisals. This person can have no financial stake in the outcome of the appraisal. Mortgage companies usually hire an Appraisal Management Company (AMC) which in turn hires a local appraiser who is on their roster. The buyer pays for the appraisal as part of the home loan process. WHAT DIFFERENT THINGS factor into a home appraisal? Appraisals are usually very detailed but most include the following: Details about the property Where the home is located, what type of area it is, and how that Comparing the property to three affects the value other properties in the area (comps) Any detrimental aspects of the An estimate of how long it would 31 property be it condition, property take to sell the home access, crumbling foundation, etc. WHAT ARE APPRAISERS looking for specifically? 'Property size Interior Improvements How big is the lot? How big is What materials were used in the Have there been any large the house? Number of rooms? inside of the property? It is high changes to the home such as a Is there room for expansion? quality or haphazard? What kinds of kitchen upgrade or a bathroom fixtures are in the home (lights, remodel? If you are the seller faucets, appliances)? you can make a list and provide it to the appraiser. Extras Is there anything in the home that Exterior would add value such as a fireplace, air What's it made of? What conditioning, hardwired sound system, is the foundation like? or a security system? Outside are there What condition is it in? improvements such as a pool, large deck or gazebo? HOW MUCH TIME should it take? There are three main steps to an appraisal: 1. Physically visiting the home 2 Comparing the home to other properties in the area that have recently sold 3. Creating a report The physical visit usually lasts a few hours. It then takes about seven days for the appraiser to complete the research and report write up. COMMON THINGS pou can do to impact it POSITIVELY? Clean up the house Tidy the outside Keep a list of updates While they might not look under Take time to mow the lawn, If you have made improvements to the bed, a generally well kept home tends to net a higher pull weeds, and touch up any your home give the appraiser a list peeling paint. of what you have done. appraisal. SOLD Do you own comps research If you know of some homes that Touch up any and all obvious flaws Location While you can't particularly change this be sure to let the appraiser have sold recently that are If there is peeling paint indoors, or similar give them the list. someone put a hole through the know of any positive neighborhood drywall, fix it. Those small improvements such as new grocery improvements will matter. stores or school. While home appraisals can be stressful and sometimes cause a hitch in the home buying process, they are a relatively simple step. Simple awareness can help the appraisal go smoothly and help the transaction happen in a timely manner. SOURGES: Lending Expert Blog Dickstein, Wendy "What is a Property Appraisal" Realtor.com http://www.realtor.com/home-finance/homebuyer-information/what-is-a-property-appraisal.aspx Wickell, Janet "Facts About Residential Real Estate Appraisals" About.com http://homebuying.about.com/cs/appraisals/a/real_estate.htm Wickell "Facts About Residential Real Estate Appraisals" Dickstein What is a Property Appraisal" Guest contributor "What Appraisers Look for During the Home Appraisal Process" Realestate.com 27 April, 2013 http://www.realestate.com/advice/what-appraisers-look-for-during-the-home-appraisal-process-51817/ Pirraglia, William "How Long Does it Take to Get a House Appraised" Sfgate http://homeguides.sfgate.com/long-house-appraised-58806.html Kalita, S. Mitra "10 Tips to Boost your Home's Appraisal" The Wall Street Journal http://realestate.msn.com/10-tips-to-boost-your-homes-appraisal