Appraisal Questions Asked By Customers
We’re presented with numerous appraisal questions geared towards real estate appraisals and what appraisers look for when visiting a client’s home. We composed a page dedicated to answering common questions with helpful answers to prepare you for an appraisal appointment.
What is a home appraisal?
An appraisal may seem like a simple, fast process. An appraiser shows up at your house for a short time, takes some photos, notes and measurements, and that’s it. However, the home visit is only a small part of the appraisal process. Did you know, a typical appraisal report requires a combined 12 hours of work, by an appraiser and their staff?
Why is a home appraisal needed?
Appraisals are useful whenever there is an interest in the value of a property. Whether for a bank, estate, divorce, or legal purposes, like probate, IRS, disputes, to name a few. The objective of an appraisal is to provide an independent and impartial analysis of property
To come up with an accurate gauge of the market value, the appraiser conducts deep research of the local and historical comparable sales data. The appraiser then uses the on-site inspection to verify the home’s size, features, and condition for the appraisal user, in many cases, the bank, located elsewhere.
What do appraisers look for in a home?
On site appraisal information needed includes: measuring size, and details about the home, its condition, any upgrades to the property, as well as its location, schools, shopping, etc. Further details can include, age, property site, construction quality, roof and foundation quality, gutters, parking, etc.
Interior items of interest include: square footage, floor plan layout, bedrooms, bathrooms and kitchens, utilities, health and safety elements, appliances, condition, code compliance. The appraiser will take the measurements and photos, find comparable properties nearby, and compile all the information into an appraisal report that reflects its fair market value.
What can you do to prepare for a home appraisal?
The appraiser shows up to do a critical job and there are things you can do to be prepared for their approval. Deep clean the inside of your home, deal with any issues related to pests and pets & secure your pets. Spend an afternoon cleaning up the yard; Touch up your paint on the outside of your home (appraisers factor peeling paint into evaluation). Don’t water the lawn or run the sprinklers (appraisers don’t want to track mud into your home and they need to measure around the outside of your house to get measurements.
How long does a home appraisal take?
An on-site appraisal process inside the home can take anywhere from one to several hours.
When do you get the results of the home appraisal and how long is it relevant?
Typically, the report takes 7-10 days or as long as a few weeks. The report will contain local comparable properties, photos and details, the appraised value, how the appraiser determined the value, and what factors the appraiser took into consideration. An appraisal report can remain relevant anywhere from 90-180 days.
What does the appraiser do when viewing the property?
Home appraisers value property by doing a walk-through of the house by inspecting the exterior and interior. Amenities and upgrades to the property play an important factor as well. The appraiser can use one of two standard valuation methods to determine the value of the property, either the sales comparison approach or the cost approach. Occasionally, an appraiser might apply both valuation methods in an effort to pinpoint an extremely accurate value. A home appraisal provides the best determination of a home’s value.
How does an appraiser determine the property value?
After the walkthrough is completed, the appraiser determines the value of the lot. The home appraiser estimates the cost of reproducing the home. The individual considers the home’s age and condition to calculate depreciation. The expert appraiser subtracts the depreciation figure from the total replacement cost of a brand new structure. The person adds in any external improvements, such as pools, landscaping, storage sheds, and decks. He adds the lot value to the total value of improvements and depreciated value to arrive at an accurate replacement cost.
Because no two houses are exactly alike, the appraiser factors in price adjustments for all the differences between the comp homes and the house being appraised, which is referred to as the ‘subject property.’ For example, if “comp A” has granite countertops and the subject property has laminate, the appraiser subtracts the value of the granite from the subject property’s total value. The appraiser continues to make adjustments for several comps, raising or lowering value based on differences in lot size, amenities, fixtures, appliances, finishes, and overall upkeep.
What’s the point of an appraisal?
Per the National Association of Realtors, the objective of an appraisal is to provide an independent and impartial analysis of real property. The appraiser conducts deep research of comparable sales data. The appraiser performs on-site visit to verify the home’s numerous factors for a final appraisal report.
What do appraisers look for in a home?
Neighborhood demographics, housing trends in the area, and available utilities. For instance, exterior considerations may include, home measurements and details, current property condition, noting upgrades made to the property, structure, age, & location. Additional exterior considerations include, property site, construction quality, roof and foundation integrity, gutters and siding, parking, and exterior condition. Similarly, interior considerations may include, square footage, functional layout, number and size of bedrooms, bathrooms and kitchens, and included utilities. In addition, health and safety accoutrements, appliances, interior condition, structural integrity, and code compliance. The appraiser will take the measurements and photos, find comparable properties nearby, and compile all the information into a uniform appraisal report. The report will conclude with a real-world selling price for the property.
At what stage during the home sale does the appraisal occur?
The home appraisal occurs after an offer is accepted within seven days after an inspector reviewed the home. The lender will send in an appraiser to assess the fair market value of the home. There is another option, as the seller, you can opt to get a pre-listing appraisal. The option can help you lock in an asking price that will get you all the way to closing. A pre-listing appraisal can be especially useful in the event that you face certain challenges in pricing your home. For example, a unique home that’s hard-to-find comps for, the real estate market is on a bit upswing, or downswing so prices are changing fast.
Who pays for the home appraisal and what does it cost?
A buyer or seller can’t order an appraisal directly if it’s for the purposes of the loan. Instead a lender will go to a third-party appraisal company for an impartial opinion. It’s the buyer’s sole responsibility to pay for the assessment and fee is set by the lender. The cost of an appraisal varies and typically increases if the property proves to be more complex.
Why would an appraisal come in under contract?
There are a few primary reasons homes fail to appraise. At the top of the list, the contract price is just plain over market value. An appraiser finds an issue with the house that impacts its value.
How does a property appraiser differ from a home inspector?
A property appraiser shouldn’t be confused with a home inspector. A home inspector scrutinizes every area of the home. Informing the prospective buyer of any potential issues, safety concerns and extensive future repairs. These type of findings may affect the home buyers decision to purchase the home. The property appraiser simply evaluates the home’s current condition and its role in the overall valuation.