Appraisers: Demystified

Some have compared appraisals to a report card for your house.  Banks and lenders want to make sure that lending you money is a good investment for them and ensure the home is what it seems.  On the other hand, sellers are interested in appraisals because they ultimately impact the asking price.

The process of getting an appraisal is pretty straightforward.  Your lender will contact a licensed or certified home appraiser near you, the visit takes about 15-20 minutes depending on the size of the home, and what they look for can depend on what the lender specifies for them to inspect.

Generally, appraisers inspect these factors:

– Meets housing codes for health and safety specifications
– Total square feet and count of bedrooms, bathrooms, and kitchens
– Overall living condition of the house
– Appliances and utilities throughout
– How functional the layout is
– State of the HVAC and plumbing systems

– Age of the house and overall construction quality
– Integrity of the roof, foundation, siding, and gutters
– Location of the house, the neighborhood, and where the property site sits
– Driveways and other parking

After examining the physical house, appraisers use market data from the surrounding area to help prepare their report.  They’ll sometimes look into things like public records, previous sales, rental leases, land and new construction costs, but comps (comparable properties) are usually the huge factor in this process.  Recent sales or currently listed properties with similar features help to predict the final appraisal report.

After all of this data is collected, the appraiser completes the final opinion of the value, and the lender then receives the report. If the appraiser deems it worth the investment, the lender will typically be satisfied with that opinion.

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