Here we have the ultimate guide to home appraisals. In this article, we will cover the following:
- What are home appraisals?
- How does the home appraisal process work?
- What to expect?
- How to Prepare your property for appraisals?
Appraisals are important for both the owner and the buyer; hence the whole process can be daunting and important for the property's future. So, let us get started.
What are Home Appraisals?
An appraisal is when a third-party and licensed appraiser estimated the total value of your home according to the market. This is done by inspecting the house as well as by researching the marketing and analyzing its position.
Mortgage lenders require a home appraisal prior to lending the amount to buy a house. This practice is common, and it is carried out to make sure that the house is worth buying the house at a price being asked.
For example, if the seller is quoting 430,000 and your offer is 415,000, but the appraisal reveals the value to be 400,000, you will either need to renegotiate or come up with the funds to equal the difference between the lender and the seller.
Getting the gist of appraisals is easy; it is preparing for them that is hard. But we have a list of things that appraisers look for during an inspection, go through the list carefully, and you will be good to go.
Preparing Your Property of Appraisal:
Following are the things that appraisers look for while inspecting your property and determining its value.
Overall Condition of The Property:
Is the property habitable? Is the structure as well as the construction done right? Are the materials used up to the mark? These are the general details that an appraiser takes in when starting the inspection of any property. This is their first and foremost step.
They take their job very seriously, and anything that looks out of place or not structurally sound goes on to their list. Apart from these big things, they take note of the overall maintenance of the house as well. This includes the paint job, door handles, leaks, minor repairs, peeling walls, damaged roof, etc.
Appraisers do not deduct points for a messy or cluttered house, but they do note if the house is being neglected like ripped carpet, odd smells, mold, infestation, cracked floors and walls, etc. So, while you are preparing your house, you need to make sure you see it from an outsider's perspective. Get rid of or repair anything that might cost you points during the inspection.
When it comes to buying, selling, renting, or even appraisals, the property's location matters the most. Appraisers, apart from the property, also take the location into consideration as it’s a major factor that affects the value of the property. A prime location always values more, and a prime location is when a proper is near to all essential amenities such as schools, hospitals, highways, entertainment spots, etc. Moreover, if your property is in a low-crime area of the city, it will be highly desirable for all types of families. All these points increase the value of the property. Apart from that, the houses or properties surrounding the house will also be considered during the appraisal.
How Old or New the Property Is:
Another important factor that appraisers take into consideration is the age of the house. Both new and old homes come with their share of pros and cons; while most people do not account for it, but it's a significant point on the appraisal list. While newly constructed houses are always high value, the old house also has the charm most families look for, so both types of houses matter.
The Exterior of The Property:
From paintwork to the look of the chimney, from pipes to the driveway, all are a part of the property's exterior. Appraisers take note of inspecting the house's exterior as keenly as they will inspect the house's interior. Everything will come in scrutiny to make sure that the house is structurally sound and habitable.
If you are due for an appraisal anytime soon, we suggest you start the repairs as soon as possible. Start with the roof; a damaged roof is a sure way of losing value on your property as a damaged roof will indicate leaking, infestation, etc. Also, look at your yard, garden, porch, and pool to ensure they are all well and maintained.
Design and Architecture of The Property:
All modern-day properties have distinct features, and these contemporary features add value to the property. An old home with a dated design may not do so well on the market unless it has the antique charm most families look for. However, an outdated design will appeal less to modern buyers and might cost you points at the appraisal.
Wear and tear can be disguised, but long-term signs of water damage cannot be rectified. Water damage invites all kinds of problems such as mold, Mildew, infestation, and structural damage. An appraiser is bound to look for such signs, and their target areas will be the basement and the roof. Apart from that, your pipes, walls as well as the ceiling will also be carefully checked for leakage and water damage.
Why is water damage such a big deal, and why should you take care of it before the appraisal? Mainly because it can damage the house's structure, but also because mold poisoning is a severe issue, and removing mold can cost thousands of dollars.
Interior Of the House:
Every bit of the house is inspected during an appraisal, but most time is spent on the interior of the house. This is where the actual drama takes place. Most buyers fall in love with the whole vibe of the property; this means the interior more than anything. A well-furnished house with modern upgrades, well-sized bedrooms, and bathroom values good in the market. Apart from that, the quality of materials used to furnish the house also matter; this includes the kitchen counters and slabs, the windows, and doors, and the flooring and sanitary in the bathroom.
All appraisers are third-party with no relation to lender, buyer, or seller. They conduct their appraisal as well as draw their reports solely on the condition and location of the property.