Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property. A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection. However, the appraiser actually already has a good idea of the property's value by the time they have scheduled an appointment to stop by the property. In other words, you don't have to worry so much about pushing back an appointment a few days just to "clean things up" in order to help influence the value of your property. A clean/uncluttered house will certainly make it easier for the appraiser to notice improvements.
The Key Components Addressed in an Appraisal
The Site: Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features...
The Design: Quality of construction, finish work, fixed appliances and any defining features
The Condition: Age, deterioration, renovations, upgrades, remaining life of the roof, obsolete features and components
The Health & Safety: Structural integrity, water and heating, and other code compliance items
The Size: Above grade and below grade improvements receive different values. In other words, rooms that are below grade, without windows on all 4 sides of the home is considered less valuable than above grade rooms.
The Neighborhood: Is the property conforming to the neighborhood?
The Functional Utility: Is the property functional as built - style and use?
The Parking: Garages, carports, shops, etc.
Other: Curb appeal, lot size and conforming to the neighborhood are obvious to the appraiser when he/she drives the neighborhood and compares your home.
When entering your home, the appraiser is going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items. This is a good time to make sure to have all carbon monoxide and smoke detectors in working condition.
Your lender will order the appraisal and utilize either an appraisal management company or a specific appraisal rotation to ensure the appraisal order is arm's length. This appraisal selection process uses licensed appraisers that are familiar with your neighborhood and the type of home you are buying or refinancing.
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