What does an appraiser do?

  • Real estate inspection: The appraiser closely examines the interior and exterior of your home, taking photos and noting its overall condition.
  • Comparables: After the initial visit, the appraiser researches recently sold homes in your neighborhood. This helps the appraiser calculate the home’s worth based on current housing market values.
  • Final report: The appraiser prepares a complete property and market analysis, which typically includes:
    • Your home’s size and condition,
    • A record of any serious structural issues,
    • Notes about recent home renovations and the surrounding area and
    • Photographs, sketches and maps of your property.

Home inspections are also critical in both the buying and selling process. Knowing what is inspected and what’s not is always good.

How Long Does A Home Appraisal Take

The appraisal usually has two parts. First, the ap

The appraisal usually has two parts. First, the appraiser must physically come to the home and briefly tour it. This only takes about 15 to 20 minutes. As a Realtor® familiar with Indiana home appraisals I can share with you the norm is that the buyer is not present when the appraiser walks through the home. With an FHA, VA, or USDA and its added verification of minimum property conditions, the appraiser may be at the property for 30 to 40 minutes.

The second part is the report. I usually do not begin inquiring about the appraisal report until 7 to 9 days after the appraiser has visited the property.

An additional frequently asked question is how long does a home appraisal last? The answer to this depends on the type of loan.

  • Conventional or insured conventional loan: lender dependent, but generally 90 days to 6 months
  • FHA loan: 120 days from the date of appraisal
  • VA loan: 6 months from the date of the appraisal
  • USDA loan: 150 days from the date of the appraisal

Video

How to prepare for a home appraisal

As a buyer, your lender sets your appraisal appointment. After that, the appraiser will go into the home and report back with their findings and estimated home value. As a seller, there are several things you can do to prepare for your home appraisal and avoid anything that may damage its score.

Tidy up the inside and outside of your house

A home appraiser’s job is to be extremely critical. Although the tidiness of your closet won’t directly affect the value of your home, it will affect the appraisers’ experience in the space and how they might value the functionality of the space overall, which does affect its value.

For example, a home with small, cluttered rooms probably won’t perform as well as the same home whose small spaces are optimized. You can tidy up the inside of your home, do a deep clean and even throw a fresh coat of paint on some of the walls. Whether you do this on your own or hire someone to help is up to you.

As we mentioned earlier, curb appeal is the first thing a home appraiser will see. For starters, break out your lawnmower and pull those weeds. If your front or backyard is cluttered, try to find space for it in the garage, if you have one, or take time to give away items.

Check out home systems

Before your home appraiser comes, it may pay to have a professional assess your plumbing, heating/cooling and electrical systems, so you know where they’re all at in terms of functionality. That way, there are no surprises during your appraisal. You may choose to update or fix one of your systems if you’re confident it will pay off financially.

Getting a home appraisal is a necessary step as a homeowner for both the buyer and seller. As the buyer, a home appraisal will help determine how much the lender gives you and will help navigate a fair deal. Home appraisals help determine the value of a house, which can help determine a listing price and help prepare a house for sale. Keep these five factors in mind when preparing for your home appraisal.

Bonus: Advice From An Appraiser On How To Prepare For An Appraisal

Advice From An Appraiser On How To Prepare For An Appraisal – Tom Horn

For some additional insight on how to prepare for an appraisal, we reached out to Tom Horn, a Birmingham real estate appraiser.  Tom has over 25 years of experience performing real estate appraisals.  

We reached out to Tom to find out what his top 5 tips were for sellers who are preparing for an appraisal.  Here is what Tom provided as his top 5 tips on how to prepare for an appraisal.

“Sometimes homeowners feel that they have little to no influence when getting an appraisal on their home but this is not always the case. There are numerous things that owners can do to help prepare for an appraisal inspection and hopefully contribute to a favorable appraisal.

Homeowners can help prepare for an appraisal in two ways. The first involves getting the house ready for the appraisal inspection and the second involves collecting information to give to the appraiser during their visit.

Tip #1: Make repairs on maintenance type items 

Be sure to make repairs on maintenance items such as leaky faucets, missing electrical cover plates, missing light fixtures, and/or missing doors. While these types of repair items don’t always translate into large deductions in value they can give the impression that the home is in worse condition than it actually is.

Don’t leave anything to chance, make the repairs before the appraiser looks at the house. If the appraisal is for an FHA loan some of these repairs may be necessary before the loan closes.

Tip #2: Provide access to all areas of the house

The appraiser must have access to all areas of of the home including all rooms, basement, attics, and closets. If there is anything that is stacked up against doors that would prevent the appraiser from opening them it must be removed so that the appraiser can get into them. Appraisers must observe all areas to make sure every feature of the home is included and all finished area is included.

Tip #3: Have a list of recent repairs or renovations

If you have made any repairs or renovations to your home in the past 15 years it’s a good idea to make the appraiser aware of exactly what was done. Examples of repairs and renovations include the following: roof replacement, heating and cooling replacement, new siding, flooring replacement, kitchen renovation, bath renovation, build out of basement or second story attic room, etc.

Repairs and renovations reduce the subjects “effective age”, meaning that if the actual age of the house is 25 years, the home might appear to be 15 years old, which could help it appraise for a higher amount. It also adds livable space and value to your home.

Tip #4: Provide a copy of the survey

A copy of a survey, while not necessary, can be helpful if your lot is irregular shaped or is larger than typical. This type of information is typically available online with the local county assessor, however if you have bought any adjacent property to increase the size of your site and have a survey, you may want to provide this to the appraiser to make sure they consider all of the property.

Make the appraiser aware of how much land you have so they will know.

Tip #5: Provide Recent sales

Are you aware of any recent sales that have occurred in your neighborhood that you believe are similar to your home?

Appraisers have access to most sales information, however private sales do occur and they may be more difficult to find unless you know the address or owner, which you can provide to them. I am always open to any sales a homeowner can provide, however that does not mean I can use them.

The sale has to meet certain criteria such as time of sale and comparability to the subject among other things. A sale is not always a comparable and the appraiser will make the final determination.

By making sure that the house is clean and in tip top condition and that the appraiser has complete information relating to repairs and renovations the homeowner can rest assured that they have done everything in their power to contribute to a good appraisal.”

Conducting the Appraisal Meeting

Clean and Repair: Preparing for a Home Appraisal

To get the best possible appraisal value, you want to make sure your home is in tip-top shape. Ideally this would mean your home is completely up to date, both structurally and through design, meaning expensive renovations. But that’s not very realistic, and the return on investment may not live up to expectations. Instead of taking on a major project, there are a number of small things you can do to improve your appraisal value, including:

  • Mow the lawn and trim any hedges or outdoor plants that need maintenance
  • Sweep the sidewalk and front steps
  • Wash the windows and replace broken screens
  • Make sure doors open and close without sticking, and ensure all locks are working properly
  • Clean and declutter each room
  • Touch up any peeling paint and remove scuff marks from the walls
  • Schedule an appointment with an electrician to get a maintenance check done for all your electrical wiring
  • Repair broken appliances that will stay with the home
  • Make sure all your heating systems are in good working order
  • Make sure smoke and carbon monoxide detectors are working properly
  • Ensure that your heating devices and cooling appliances like your air conditioning unit are in working order
  • Fix any roof or gutter problems – check for loose or missing tiles, look in the attic for leaks, clean your gutters, etc.

If you’re able, look at previous appraisals on your home and see what brought down the value of the property in the past. If you can address those issues specifically, you’ll have a better chance at a higher appraisal value.

What Is An Appraisal?

If you’re selling your home and you’re not sure what an appraisal is, you first need to understand this common real estate term.

An appraisal is an unbiased estimate of the true market value of a home. 

An appraisal is required anytime a borrower is going to be getting financing from a mortgage broker or lender in order to purchase a property.  An appraisal serves as a safeguard for the lender who is funding the money as it ensures that a borrower is not paying more for a property than it’s truly worth, which protects the lender from over funding.

Many people make the common mistake of believing that an appraisal and home inspection are the same.  There is actually a significant difference between an appraisal and a home inspection.

7. Do Some Last-Minute Preparations

On the day of your appraisal, you’ll want to do everything that you can to help your appraisal go smoothly – you can even attend your own appraisal, which is one of the main differences between a refinance and a purchase appraisal.Here are some things you can do a few days before your appraisal and on the big day to maximize your home’s value.

  • Ensure you have the day off work. Check your schedule and make sure you’ll be able to be home for your appraisal. Can’t get that day off? Appoint a spouse or trusted family member to help guide the appraiser.

  • Make plans for children and pets. Children and pets can be a distraction. Arrange for children to be out with a family member or friend on the day of the appraisal or quietly playing in a bedroom or playroom. On the day of your appraisal, make sure that pets are in their carriers or crates.

  • Write down a few notes to jog your memory. You’ll want to make sure that your appraiser sees all of your home’s best attributes. However, it’s normal to forget what you want to show them if you don’t write it down. Make a short list of your home’s most charming points and keep it on you when the day arrives.

  • Do some light cleaning. Tidy up on the morning of your appraisal. Remove smelly garbage and wipe down your countertops. Put away books, clothing and anything else that’s out of place.

  • Set your thermostat to a comfortable temperature. This can help your appraiser subconsciously associate your home with comfort. It also makes testing the heating and cooling systems a bit easier.

Inspect Your Property

Inspect your home with an unbiased eye before the Appraiser’s visit. Look for anything alarming and address it immediately.

Appraisal inspections are not home inspections. Appraisers do not assess the home’s functionality and working condition; however, they are the lender’s eyes and ears. Appraisers are obligated to report any concerns that may warrant further inspection.

For example, an Appraiser may take pictures of cracks in the walls, notate that doors stick, and ultimately recommend a foundation inspection. This could be a significant inconvenience if those are benign and due to long-term settlement. Address alarming items before they become issues.

Let’s be very clear: we are not suggesting anyone mask known defects. We’re simply recommending that sellers address non-issues to remove the possibility of misinterpretation.

5. Make Sure Everything Works

Your appraiser won’t walk around your home testing light switches and outlets, but you should make sure that all your home’s major systems are functional. Go through your home with this checklist and make sure that everything is working.

  • Run your heating and cooling systems. Time how long it takes for your home to reach the requested temperature.

  • Engage your home’s security system. Make sure that only the correct code arms and disarms the system.

  • Open and close all of your home’s windows. Look for cracks and warping near your window bases. Lock and unlock each window.

  • Test your kitchen appliances. Run your dishwasher with dirty dishes and make sure they come out clean. Heat up your oven and use the burners.

  • Run your ceiling fans. Turn them on and off and pay attention to how long it takes for your fan to start and stop. 

Schedule a repair before your appraisal if you notice that something doesn’t work. 

Conclusion

A home appraisal is an assessment of a home’s condition and market value. This assessment is usually ordered by the buyer’s lender and is completed by a licensed appraiser selected by the lender. The homebuyer pays for the appraisal.

Home sellers can increase their home appraisal value by taking steps before the appraisal occurs. This includes putting the home’s best foot forward by cleaning the home, having the exterior looking well-kept, and staging the home to be attractive. Additionally, make the appraiser’s job easy by making it convenient for him or her to schedule the visit, get in the home, and access all areas of the home. Think of the appraisal as the most important home showing during the home sale process.

Home sellers have four options when a home’s appraised value is less than the agreed-upon purchase price. You can appeal that the value is revised, negotiate with the buyer to close the gap, lower the purchase price to the appraised value, or start over and put the home back on the market.

Home sellers working with an experienced Realtor® are less likely to suffer from an appraisal surprise. This is because a skilled real estate agent will price your home reasonably within the marketplace and talk about appraisal risks before you are that far into a home sale transaction. If you are thinking about selling a home in Indiana feel free to contact me. I can help you and offer some of the lowest real estate commission fees in Indiana for a full-featured home selling service.

What if the appraisal comes in low?

Bad news: The appraiser files the report and you learn that your home is worth less than you thought. What can you do?

“First, read their report carefully and confirm all the information about your home is accurate,” Ho recommends. “Appraisers are human, and it’s possible they entered the wrong data.”

You might consider contesting the report or asking for a second opinion. For the former, “you’ll need to document some evidence why your home should be worth more,” Ho says. “Perhaps there were recent homes sold privately or other comparables not considered that a local Realtor can help you find proof of. A second opinion would mean paying for another appraisal by a different professional.”

Ailion cautions, however, that it isn’t easy to successfully appeal a valuation.

“As a last resort, you can shop for a refinance from a different lender and start the process all over again,” Ailion says.

Learn more:

Tags

Leave a Reply

Your email address will not be published. Required fields are marked *