What do Appraisers look for in the home during the inspection?

A: The physical inspection of the home is part of the data gathering phase in the appraisal process. Appraisers are measuring the home and taking notes on quality of materials (upgrades/remodeling) and condition (the age of the materials). Any deferred maintenance (needed repairs) is also being noted, with a focus on any health and safety issues, such as exposed wiring, or an empty pool with no gate. After gathering this data, it allows the Appraiser to find the most similar "comparable," sales that will be relevant in determining an opinion of value.

How much does a home appraisal cost?

A: The cost of an appraisal primarily depends on the complexity of the assignment. Characteristics of a home that might add to the complexity of an assignment include; Detached buildings such as guest house, garages, horse facilities or workshop; The size and design of the home; The size of the lot; Unusual characteristics for a neighborhood or market area, such as converted area's which might make the home larger than any sales in the neighborhood; Premium location and/or views; Extensive front/rear landscaping. If a home has one or more of the above items, the complexity is increased, and the fee will most likely be above the standard fee. The other factor given consideration in a fee quote is the time frame given to complete the appraisal assignment. A 48-hour rush will be a higher cost than a typical 3-7-day turnaround time.

What are some general things I can do to improve my home's value?

A: Caveat, these are suggestions and are not a guarantee of any kind. What increases a home's value is always market specific. For example, having a pool in a retirement community might not add as much value, or may even be a negative factor, vs. in a neighborhood of mostly families. The following suggestions are things that work in most market area's given the right market conditions and are some of the most cost-effective things that can be done, i.e., the most bang for your buck; Paint the interior; New flooring; Update kitchen with new countertops and appliances; Update bathrooms with new vanities and fixtures; Install new fixtures (ceiling fans, lighting etc.).

Can the Buyer be present during an appraisal?

A: Yes. At the inspection the Appraiser is gathering data, so it's a good idea to let them focus on that, so they do not miss something or make a mistake in their measurements. I would suggest writing down all upgrades or any special features that you want them to know about ahead of the inspection with the year the work was done next to each item. Give this to the Appraiser at the beginning of the inspection. This is particularly important for any items which might not be readily visible such as a new A/C unit, water heater, or roof. Try to avoid discussions of value, at this stage the Appraiser has probably not developed his/her report and does not know. Also, whoever orders the appraisal, is the Appraisers Client. An appraiser has confidentiality with their Client, which means they may not be able to discuss value with you even if they had one. Just because you are paying for the Appraisal does not mean you are the Client, this is a common misconception. An example of this would be a refinance appraisal. The Lender typically orders the appraisal and is the Client.

What is the difference between a home inspection and an appraisal?

A: Home Inspectors and Appraisers sure seem a lot alike, and you wouldn't be alone if you mistook one for the other! They both perform an inspection of your home and they both produce a report that evaluates your home. So, what's the difference? One simple way to differentiate the two is to think about it this way: the home inspector will evaluate your home from the surface inward, while the appraiser will evaluate your home from the surface outward, including the neighborhood and surrounding market. An Appraiser will observe the structure of your home and its systems, and in some cases may operate some systems, but will generally not disturb anything to do so. Unless there is an obvious issue, the Appraiser assumes in many cases that the structure and systems are serviceable similarly to other homes sold recently in the local market area. Meanwhile, the Inspector may take a deeper dive into certain structures and systems to look "under the covers" to determine how serviceable they are and whether a home buyer can expect them to last a reasonable amount of time, or should request the seller to repair, or factor repair into the sales transaction. An Appraiser may note repairs needed when they are apparent from basic observation. The Home Inspector will typically have more expertise in these structures and systems but will generally not have the expertise to evaluate the effect on the overall value of the home. A Home Inspector can give the buyer an assessment of their risk of repairs needed, while the Appraiser gives the Lender an assessment of their risk of lending on the home for mortgage-backed sale transactions. For non-mortgage situations, such as cash sales, estate settlements, divorce settlements, tax assessments, and others, the Appraiser helps all parties involved understand the value of the home, where the definition of value fits the specific situation. Your specific situation will determine whether you need both a home inspection and an appraisal or one or the other.

Do I need to have a home appraisal?

A: There are many questions with home appraisals where the answer is, "It depends!" And this is one of them. If a home is being sold and the buyer is financing a portion of the purchase price, or a home is being refinanced, the lender will make the determination whether an appraisal is required based on their risk assessment, which will include the financing terms the borrower is requesting (e.g. amount of down payment, total loan amount, loan term, etc.), the characteristics of the home (age, size, quality, condition, location, etc.) and the current state of the overall market. If the Lender determines the risk is below their threshold, they may waive the appraisal; if above, an appraisal will be ordered by the Lender. For non-lending situations, such as a cash financed sale, estate settlement, divorce settlement, real estate investment and tax situations, an appraisal may or may not be necessary but significantly improves the likelihood that the parties involved will have confidence in the value. If an attorney or other expert on the matter is involved, they can often provide guidance on whether an appraisal is needed. In some cases, multiple appraisals may be ordered to further improve the level of confidence. Another opportunity to leverage an appraisal is sometimes referred to as a "pre-listing" appraisal. These appraisals are often used for complex and/or unique properties prior to putting them on the market to improve the likelihood of getting the best value for the property and minimizing the chances that the property sits on the market for an extended period.

What do appraisers really do?

A: Our primary function is to be an unbiased participant and provide information and analysis based on data that can be relied on by our intended User(s).

What is involved in a typical appraisal inspection?

A: The purpose of an appraisal inspection is to gather information about the home that is the subject of the appraisal, as well as corroborate and validate that information with multiple sources when necessary. Before an Appraiser comes on site to the home, they will typically gather as much information as possible from sources such as public records (e.g. county assessor and/or county recorder), the local Multiple Listing Service (aka MLS, if the home is listed for sale currently or has been listed in the past) and phone interviews with individuals such as the listing agent (if listed in MLS), builder (for new construction) and/or homeowner (if available). While on site at the home, the Appraiser will take pictures of both the exterior and interior of the home, measure the exterior of the home (and some portions of the interior, in certain cases), walk the home noting room locations and functions, make notes about the quality and condition of materials used in the construction of the home and do a short interview with occupants or real estate agents, if they are present. An inspection is not required for every appraisal, but when an inspection is made, it is very helpful with ensuring the appraisal is as accurate and credible as possible.

How long does an appraisal inspection take? How long is the entire process?

A: For many homes, the appraisal inspection will take about an 30 minutes to 1 hour. For more complex homes, particularly for multi-level, larger homes, it may take a little more. For custom homes and homes with significant outbuildings and other exterior structures, more time could be required. See "What is involved in a typical appraisal inspection?" for more details on what happens during the inspection.

The time it takes to inspect the home is a relatively small portion of the total time required to produce a quality appraisal. Prior to the inspection, the Appraiser will have spent a significant amount of time doing "pre-inspection" research about the home. In addition to inspecting the home that is the subject of the appraisal, the Appraiser will also be driving to multiple homes like the subject which have sold recently to do an exterior inspection. These recently sold homes will be used for the most common approach to valuing a home, known as the Sales Comparison Approach (other approaches may be used in addition under certain circumstances). The Appraiser then will spend a considerable amount of time doing "post-inspection" research, analyzing all the information gathered and creating the final appraisal report. The inspection is sort of like the proverbial "tip of the iceberg."

What should I do before the Appraiser comes to my home for the appraisal inspection?

A: When the Appraiser sets up the inspection appointment, they often give a short list of things the Homeowner or other occupant can do to be ready for the inspection. These include things like unlocking a gate to the back yard, raising the garage door (the interior of the garage will be measured by the Appraiser), turning on lights and/or opening window coverings (for interior photos of each room) and crating pets or positioning them where they won't run away or cause any safety issues.

During the inspection, the Appraiser, is primarily observing the quality and condition of materials used in the construction of the home and generally ignoring any clutter. It never hurts to make your home as presentable as possible. You don't need to worry about your home being "ready to show" as you would for a potential buyer but doing simple things like clearing dishes from counters and sinks, making beds, and generally picking up will help the Appraiser see what needs to be seen. Also, if the appraisal is for a sale rather than a refinance, keep in mind the lender requires photos of every room be included in the appraisal and the Buyer will get a copy of the appraisal.