What’s Involved in a Home Appraisal?

Everyone has heard of a home appraisal. Do you know what is involved? You will after reading this.

An appraisal is a valuation of a home or property, usually a home you want to purchase. The appraisal is not always necessary, but if you are financing the home or property, the lender will typically require one. The lender requires the appraisal because they are only willing to lend you some portion of the value (based on their lending guidelines) using the property as collateral.

The buyer is responsible for paying for the appraisal, but the appraiser must not have any financial incentives to appraise one way or another. They must be an independent third party. Typically the appraiser is hired through an Appraisal Management Company, by the lender. The cost of the appraisal is typically paid upfront and not included in the rest of the mortgage fees.

Appraisals are described as an art rather than a science, but they very detailed. Most include: property details, the price and features of comparable properties, location, type of area, things that may negatively affect the value (condition, access, foundation issues, etc), and how long it might take for the property to sell.

Property size: they look at how big both the lot and house are, also how many rooms does it have, and if there room to add-on.

Interior: they will document the materials used, the quality of workmanship, and types of fixtures (lights, ceiling fans, appliances, faucets, etc.).

Exterior: factors include materials used, condition, foundation, paint (if there is any), and roof.

Improvements: recent upgrades (bathrooms, kitchen). It is a good idea for sellers to make a list of upgrades to provide to the appraiser.

Extras: anything that adds value to the property. Fireplace, central A/C and Heat, sound system, security system, Smart House devices, pool, screened patio, gazebo, etc.

How long does it take?

The appraiser is going to have to visit the property, this should only take a few hours. The rest of the process (finding comparable homes and creating a report of the findings) takes about a week.

There are a few things a seller can do to make sure the property looks its best. Well kept, clean homes tend to appraise higher. A home with a well kept lawn and landscaping (no weeds or peeling paint) presents much better. Work with your Realtor to compile your own list of comparable homes to provide to the appraiser. Patch holes and give it a fresh coat of paint, these are relatively easy things you can do inside the home to make it look tidy and new.

While it can be a trying experience waiting for the results, it is a relatively easy step. Hopfully the above mentioned things can make help put your mind at ease during the process. If you are thinking of listing your property for sale or looking to buy a new one, contact the Kavie Stahl Team. We are full of helpful tips and are experts in helping you with any of your Real Estate needs.