What Real Estate Appraisers Look at During an Appraisal
Home appraisals tend to cause a lot of stress and anxiety on the home buyer and seller. Therefore, before you start freaking out, take a breath, and let’s talk about what real estate appraisers look at. Throughout this blog, we will be taking a look at what appraisers look for when they are assessing your home. It’s essential to remember that a lot of people get anxiety when going through this process, but it’s okay and completely natural.
With that said, an appraisal is one of the final steps in the closing process, especially if the buyer has a financed offer. Today, we are going to dispel any ounce of fear since fear is only a lack of evidence, and the best way to overcome fear is with knowledge. There are five main areas that real estate appraisers are going to look at.
Your Home’s Exterior
When an appraiser looks at the exterior of your home, they are evaluating the soundness of your property’s structure. They also look at the quality of workmanship with the property. Furthermore, they look at the maintenance of your home. So, if there is a hole in the roof, that will be something you will need to fix because it can materially affect the value of your home. Therefore, the appraiser will be looking at anything that is considered health and safety conditions. This way, they can ensure that the property is not going to harm the buyers moving into your house.
So, if anything is going on with the foundation, disclose them upfront, and get the repairs done if you can. If there’s a crack in the wall, it may not present an issue if it’s a settling crack. At the same time, if you can put some caulk on it and repaint it, you should. Then, when it comes to the roof, anything that needs to be repaired, you need to make sure to fix it. An appraiser is going to pay attention to those areas of the home to ensure the house is of sound quality.
The Size of your House
Some people think that an appraisal is only about the numbers when it comes to the square footage of their home. Although the square footage plays a critical role in determining the price, other factors are considered. Therefore, you need to be aware that the appraiser will be taking a specific look to verify the measurements of your property. For example, if your house is 3,500 sq feet, then the appraiser is going to come out and make sure that your home is 3,500 sq feet.
The Interior of your Home
When it comes to the interior of the house, what is an appraiser looking at specifically? These include:
- The Kitchen
- And the Bathroom
So, it’s a lot of different components the appraiser is going to be looking at and investigating when they go through your home. When they are looking at these components, they are ensuring that everything is in operable condition, and everything is being well maintained.
The Improvements You Have Made to your House
This is where a lot of people say how do some homeowners flip a house and make more money. Well, they are taking a specific interest in the critical components of homes that add resale value, which is the same thing an appraiser is going to look at when they evaluate your home. With that being said, what are those components? Some of the major ones include:
- The flooring type you put in
- A kitchen remodel
- A bathroom remodel
- And any updates to the HVAC system
These kinds of improvements will have intrinsic value on your house. However, one thing to keep in mind is if you’re planning any home renovations is don’t over-improve for your area. This can have the opposite effect. Therefore, you want to make sure that the improvements you’re doing are keeping up with the area where your home is located. This will help you get the money back from those renovations and get the best appraisal possible.
Amenities of your House
Amenities are something that is going to make your house stand out compared to other homes in your area. So, when the appraiser is doing their assessment to your home, you will likely receive an added value. Another amenity could be a barbecue pit or outside grill that is built-in to a barbecue stub in the house. There is a lot of different amenities that homes can have, and all these amenities will be considered and adjusted for the price of your home when the appraiser comes out.
How Does the Appraiser Calculate the Value of your House?
Now that we discussed what the appraiser looks for, let’s dive into how the value of your home is calculated. In most real estate transactions, an appraiser will be using a method called the comparable sales approach. A comparable sales approach is when the appraiser uses market information and data that is the most similar to your home. For example, if you have a ranch-style home, you don’t want your home compared to a two-story beach house. An example would be if your house is 3,000 sq feet, you don’t want your home compared to one that is only 2,000 sq feet.
Typically, an appraiser will compare homes within a particular variance and make adjustments accordingly to properties in the area around your house. Moreover, when using a comparable sales approach, an appraiser is going to take a specific look at the location, age, the condition, and any amenities other homes in your area will have.
Therefore, if there is another house on your block that has four bedrooms and yours has three bedrooms, but everything else is comparable. The appraiser would then adjust to show that you have a three-bedroom home, and the other house has a four-bedroom home. Then, the appraiser would adjust your price down by taking out the cost of one-bedroom in your area.
Appraisals are very common during the home selling or buying process. However, a home sale isn’t the only situation where you might need an appraisal. An appraisal may also be required for either insurance or tax purposes. Getting an appraisal can seem very intimidating at first. Besides, people take great pride in their homes, and an appraiser’s job is to make judgments on what it is worth.
If you need more information on this subject or have any questions, contact a professional appraisal company for peace of mind. For a quality fha loan inspection in Orlando visit Sunbelt Appraisals.