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| How Real Estate Appraisals Are Really Done (Photo credit: Dave Dugdale) |
A
home appraisal is used to determine the value or worth of a property. It is
mostly used to determine how much a lender can give the buyer for the purchase
of the property in question. It is an expert opinion to protect the financier
from getting stuck with a property worth less than the invested amount. Don't
mistake the appraisal process with an inspection process. An inspection
involves noting potential problems that can prove costly to remedy in the
future, while an appraisal uses the general state of a property to determine
its worth.
What to Expect During the Appraisal
Process
Here
is what you should expect during a home appraisal:
Full Access
Expect
the appraisers to want full access to your home. The appraisers will want to
look over all areas including the garage, attic or basement. This is done to
determine how well the property was constructed and how well it has been
maintained.
Photographs
The
appraisers will also take a lot of photographs of your home, both the interior
and the exterior. The photos will be shown to the lender as proof of the
condition of the house.
Overview of the Home
You
should also expect the appraisers to be interested in the general overview of
the house. This includes foundations, improvements, type of rooms, number of
rooms and even its age. This overview, however, will not be as thorough as the
inspection process.
Square Footage Approximation
The
appraisers will also be interested in the total square footage of your home. In
this estimation, the non-living areas are usually excluded, but just jotted
down as side estimates. Examples of non-living areas include porches and
garages.
How to Prepare Your Home for an
Appraisal
To
ensure that your home is properly appraised, and that the appraisers see its
real value, you should prepare your home beforehand. Here is what you can do to
help:
Improve Your Curb Appeal
Your
front yard makes the initial first impression for those who come to your home,
appraisers included. This means if you wish to make your house presentable and
well maintained, you cannot ignore the curb appeal. Work on the yard area and
the general appearance of the exterior. Ensure that you get rid of any mold and
mildew that may be present, clean the gutters and remove overgrowth on the
sidewalks. While curb appeal may not necessarily be used to appraise the
property, it can be useful in affecting your appraisers' attitude even before
they examine the house.
Note all the Updates
You
should note all the updates and improvements you have made to the home and show
them to the appraisers. This list should preferably cover all the updates done
within the last 15 years. If you have their approximate dates and costs, it
would be helpful too. Some appraisers also say that you should also include the
noteworthy features of your home. Appraisers are professionals, but they are
still human and it is easy for them to miss something.
Note Neighborhood Changes
Some
people might say that this is an appraisers' job, but it still doesn't hurt to
give them a hand in it. After all, they may not be aware of the next door
property sold without the involvement of an agent? Data from such a sale may
not be readily available.
Paperwork
You
should have the necessary paperwork ready before the appraisers arrive. This
includes things like certificates of occupancy, tax bills, financial statements
and others that may be needed. If there are reports from recent appraisals, you
should present them too.
Most
appraisals are done when a property is to be sold, but that is not the only
occasion that calls for an appraisal. Most insurance companies request a home
appraisal before determining homeowners insurance
rates. Irrespective of the reason for the appraisal, you should prepare for it
using the above tips.
