The House Appraisal Process Reviewed
Are you wondering what an appraiser will look at when evaluating your home? Real Estate appraisers are in a tricky position, as their role is to go to the house and make a fair house appraisal confirming that the price is right for everyone, including the bank lending the money.
The buyer’s mortgage lender will want to know that they are not making a foolish mistake lending more than a house is worth. Home appraisals are usually paid for by the borrower. The cost of the appraisal becomes part of the buyer’s closing costs. Benzinga has some helpful information on the cost of an appraisal, which generally ranges around $400-$800 depending on where you’re located.
So the Real Estate appraisal takes a lot more work than we think when the property has to be viewed from several different aspects weighing up value and marketability.
What Will The Home Appraiser Be Looking At?
You have found your perfect home, and your loan has been provisionally approved by the bank, depending on the valuation or home appraisal. The Real Estate Appraiser is a professionally trained agent specializing in valuing properties.
He or she assesses various aspects of the property, including boundaries, size, proximity to services, and local sales in the last year. Often this process does not take too long, and an experienced appraiser knows just what to look for, including:
- Interior and exterior characteristics and amenities
- Neighborhood appeal
- Driveway, garage, outbuildings
- Transport options, schools, and shops.
Inside The House Appraisal
Inside the house, they will measure room sizes often done with the help of a floor plan if available. The appraiser will want to know how many square feet in the whole house, the number of bedrooms and bathrooms.
Any historical features that may be of significance if the home is older. In areas where basements are common this whether there is one will become an appraisal factor. Significant improvements such as the remodeling of the kitchen and bathrooms will be duly noted. The appraiser will also look over the condition of the walls, floors, windows, HVAC, and electrical systems.
They may also be required to note whether the house has smoke alarms installed, depending on the state ordinance.
Other Factors When Appraising a House
The appraiser will also note whether the house gets enough light and whether it is subject to noise ( it may be on a busy road and be very noisy), as this can lower the property value.
Outside, the appraiser will be looking at the state of the foundations, the siding, and the gutters to make sure there are no holes or rot in them. In short, he will look for any weakness in structural integrity and the general maintenance of the building.
Many people paint their houses before putting them on the market, and peeling paint on the outside will definitely lower the property’s value. On the other hand, some things will add value, and these are the following necessities.
- Any energy-efficient items like solar panels.
- Fencing around the boundary
- A porch, patio, or deck.
An inground pool may add value, depending on how much maintenance is involved. In a way, it only adds value if the purchaser wants it there. Pools can be meaningless to some buyers, while for others, it is a significant deciding factor.
A new roof in an old house would add a lot more value to the property than a pool. An air-conditioning system will also add value, so if you have recently installed air conditioning, keep the receipt for evidence when you sell the house.
The Appraiser Will Not Be Looking at The Following
The appraiser will not be looking at the home’s general aesthetics. So if you have bad taste in paint color, it may hinder your chances of the home selling quickly. Thankfully, it is unlikely to affect the appraiser’s opinion of the home’s overall value, as it can be easily changed.
Other things like beautiful plantation shutters on the windows don’t really add value, as they are considered personal effects. I find this interesting as they add sales value but do not add to the property’s valuation.
Other amenities like a garden shed or a hot tub don’t typically add value because they are moveable. Still, obviously, no one will move it, so like the planter shutters, it adds marketability.
It goes without saying that if your home is located on some kind of body of water, it will increase the value of your property. Water also has several recreational applications adding to value.
Other Considerations For Real Estate Appraisals
If you are a property owner having your property appraised for sale, you need to do a few things to get it ready before the home appraiser comes.
- Keep receipts of recent improvements handy – you will want to show the appraiser a record of any recent major improvements.
- Paint the outside, and clean up the yard around it.
- Fix any important defects that could detract from the value.
- Make sure the house is clean inside (get a contract cleaner in), including windows. A great looking home could influence the appraiser.
- Ensure that all areas like the basement and attic are accessible.
Final Thoughts on Home Appraisals
An appraisal is a vital part of most real estate transactions. A seller needs to be prepared for it when so much is riding on your sale. Do what you can to make your home as presentable as possible. Follow any guidance given by your real estate agent.
Hopefully, you now have a better understanding of what the appraiser will be looking at and can be ready for what awaits.