What Is a Home Appraisal?
A home appraisal is a process that is conducted by a trained and licensed home appraiser. These professionals must complete 150 hours of education, an apprenticeship, and additional courses based on their specialty.
These unbiased opinions range in cost, depending on your location. The cost is frequently the responsibility of the buyer, although that again can depend on the state of the housing market.
Home appraisals are almost always a part of a real estate transaction, although you might be able to get an appraisal waiver, which would not require an appraisal. Most real estate contracts even have a clause that allows for voiding if the appraisal doesn't support the agreed-upon price.
Lending companies will rarely approve a mortgage for an amount above the appraisal value.
What to Expect with a Home Appraisal
A home appraiser is different from a home inspector, whose role is to help you understand the condition of a home. Still, a home appraiser will use the condition of your home overall to determine its market value.
A home appraiser will use the condition of your home overall to determine its market value.
An appraiser will perform many steps to come to this conclusion, including:
Tour the Outside of the Property
A home appraiser will schedule a time to take a walk around the exterior of the home. They'll be looking at the condition of the foundation and roof, as well as other markers of deterioration. They'll also look for features that could add to the value of the property, like an inground pool or fencing.
Visit the Inside of the Home
An appraiser will check that the number of rooms, windows, and closets on the property is the same as on the public record. If there are permit violations or other legal concerns, this could present a problem in terms of overall value.
They’ll also inspect the garage and any upgrades. They'll test all the light switches and appliances to confirm that everything is working as it should.
Research the Neighborhood
The home visit is just the start of the work that goes into an appraisal. Next, the professional will research the neighborhood. They'll look for recent sales of comparable properties, as well as any big changes in the area that could positively or negatively impact the market value of the home.
Talk to Other Experts
The most thorough appraisals also include external conversations about the property. Are there reputable schools in the area that will add to the desirability of the home? Are there plans for nearby shopping developments? They will need to find out details about the local area and any planned construction projects, such as if it will have bright lights or loud noises.
Craft a Report
Once the home appraiser completes their investigation, they will write a report. This document is what mortgage companies use to approve loans. Real estate agents can also use the information to price the property realistically for a faster sale.
10 Tips for a Better Home Appraisal
Much of what goes into a home appraisal is out of the control of either the buyer or the seller. However, there are still many things that a homeowner can do in advance of the visit to maximize the value of their home.
1. Inspect it yourself first.
Before you schedule the home appraisal, take a critical look around your own property. Pretend you are an appraiser and use a notebook to make notes about things that may add or detract from the home's value. Don't let any issues catch you by surprise.
At the same time, do your own research to create an idea of the market value. Often, homeowners over-estimate the value of their homes compared to what the home appraisal says. Look at online calculators and talk with real estate agents to get other opinions.
2. Make necessary minor repairs.
Once you know what needs to be fixed on your property, you can prioritize fixing the most noticeable or manageable repairs. Things like broken door handles, leaky faucets, and peeling paint won't take a lot of time or money to fix, and they can improve the appraiser’s overall impression of your home.
If you know of a major repair that needs to take place, contact a contractor to get an estimate for the work. Your home doesn't have to be perfect, but you should share any research you've done with the appraiser. They may think the repair is much more costly and deduct the wrong amount from the market value.
3. Clean up the yard.
Once you've inspected your home, spend some time on your landscaping. This doesn't mean adding expensive new plants or tearing up hedges. Just make sure the lawn is cut and big piles of debris are cleared before your appraisal visit.
4. Make the inside "show ready."
You'll want to get the inside of your home cleaned up as well. Think about how you want the house to look during a showing with a real estate agent. That's the same level of clean and organized it should be for the appraisal.
Home appraisers don't necessarily care if the house is messy, but clutter can indicate that maintenance routines for the upkeep of the house were also forgotten. It's recommended to give the house a deep clean, remove most of the personal items, and get everything photo-ready.
Home appraisers don't necessarily care if the house is messy, but clutter can indicate that maintenance routines for the upkeep of the house were also forgotten.
5. Collect your paperwork.
To help expedite the process, it's a good idea to have some paperwork ready, either in hard copies or in a digital format. The home appraiser may ask for a list of recent improvements and upgrades, as well as any other information to improve the desirability of your property
6. Be available during the visit—to a degree.
Being on hand to answer questions and clarify concerns during the appraisal can be helpful, but be careful not to overstep.
Especially if your home holds significant sentimental value, you may want to give the appraiser some space while they work. Arguing for the value of your home isn’t going to do anyone any favors.
If you think that hurt feelings may come into play during your inspection, it might be a good idea to have a family member or friend who is knowledgeable about the property answer questions instead.
7. Take the pets for a walk.
You'll want to arrange for any big or noisy pets to be elsewhere during the appraisal. Barking or even signs of pets, like excess hair on couches, can be distracting and may negatively impact the bottom line.
8. Don't bother the appraiser.
In general, give a home appraiser space to do the necessary work. This isn't the time to ask questions about the process or their thoughts on the market value of the home.
It can take about 10 days for the report to be completed. Be patient and don’t push for answers before they’re ready. You'll want to make sure the appraiser considers all elements of the property before determining its value.
9. Review the report for errors.
When the report is released, read it fully and make sure there aren’t any glaring errors. Compare the market value in the report with the amount you estimated before the appraisal. Both the process and the reasoning behind the determination should be clear.
10. Discuss if you have questions.
If you disagree with the home appraisal, it's better to talk with your lender. Either they'll realize the appraiser made a mistake or you'll learn something about the appraisal process.
For example, it's possible they may have used a distressed or foreclosed property as a comparable sale to determine the value of the neighborhood. If you can show examples of homes in the area that are similar to yours that sold at a higher rate, be sure to share this information.
Get Prepared for Your Home Appraisal
The more you know about the home appraisal process, the more prepared you'll be and the smoother everything will go. "Curb appeal" isn't just for showing the house for sale—by getting everything on this checklist in order, you'll be able to get the best market value you can for your home.
If you're ready to buy a new home, you'll want to get the lowest interest rates available. We're Lower and we're happy to help.
