When buying, selling or refinancing a home there are many steps involved in the process. One of those steps is having the appraisal done. When getting your home appraised, here are 5 things you need to know about residential appraisals.
First you should know about are the three different steps of the appraisal process. When an appraisal is ordered, usually either by a bank or lender, the first step is that the appraiser, or inspector, will come to your house to evaluate it to determine its fair market value. Next, he’ll do a comparative market analysis by looking into similar homes that are near yours and into recently bought homes to find a fair price. Lastly, he’ll generate his final report according to his research and the inspection.
The purpose of the inspection is to determine the physical condition of your house to calculate its fair market value. The appraiser is also ensuring that the property actually exists and is suitable for residency. He’ll look at the condition of every room and check for damage on the interior or exterior that would lower the value. He’ll also verify that any improvements you provided on the pre-inspection paperwork truly did happen and he’ll look into permanent fixtures that affect a home’s value. There’s no reason to withhold information or lie to the appraisers so to make sure your appraisal is on the schedule be sure to provide full and correct information from the start.
Inspectors are Objective
No matter what the result of your appraisal is, you should keep in mind that the appraiser will always be an objective inspector. He won’t take into account anything in your personal life or why you need to sell your house. He’s there to figure out the home’s current value based on its location, age, features, and size and nothing else.
Value Can Change
Values can change overnight and without warning. If your appraisal ends up being much lower than what you researched last week, it could be that the home’s value decreased in that time. If you sell months after an appraisal was done then you’ll probably want to get another one done. Also keep in mind that the money you invest in renovations or upgrades may not increase the home’s value by the same amount. For example, putting $10,000 toward bathroom upgrades doesn’t mean your homes overall value will increase by that much. It could but there are no guarantees.
Just like with medical care and car damage, you can always get another opinion from a different appraiser. The first inspection isn’t necessarily completely accurate so if you’re unhappy with the results, you can have another appraiser come. That’s completely up to you. You’ll have to pay for the subsequent appraisals but if you find one that appraises your home at a higher value, the money could come back to you.
Once you’re through your appraisal, you’re ready to buy, sell, or refinance your home! To make the process easier on you, consider hiring a realty company like SFI Realty, Inc to help through the many steps.