What Home Appraisers Look For
Generally, home appraisers look for the overall condition of a home, inside and out, as well as the quality of construction. Appraisers take note of the home's layout, special features, renovation updates or additions. Home appraisers use this information to assess, compare and value the property. They usually only consider real property and permanent fixtures, such as in-ground swimming pools or guest houses, in the valuation process.
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Appraisal
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An appraisal is a written estimate of your home's current market value by a professional appraiser, but it is not the same as a home inspection. Home appraisers look for major defects or issues, but they do not perform a detailed inspection of the home's condition, like examination of the plumbing, wiring, roof, appliances and so forth. In their detailed reports, appraisers will include a comparison of your home to comparable homes in the neighborhood and surrounding area. They will determine what comparable homes are selling for and how quickly.
Sales Comparison
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There are generally two types of appraisals done, cost comparison and cost/replacement analysis. Appraisers may also use a combination of both types. The sales comparison appraisal method focuses on similar properties in your neighborhood and surrounding area and the sale price of those homes. An appraiser determines how these other homes compare to yours in terms of amenities, location, square footage, number of bathrooms and bedrooms, lot size, quality of construction and age of the home. Using these factors, the appraiser determines a value for your home in relation to the comparable homes. Many times, a sales comparison appraisal only requires the appraiser to drive by your home to assess it from the outside and evaluate the neighborhood.
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Cost/Replacement Analysis
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With a cost/replacement analysis, home appraisers are looking for what it would cost to completely replace your home if it was destroyed, requiring a more thorough examination. A professional appraiser will come into the house, take measurements inside and out and snap a few pictures. With this type of appraisal, the amenities, upgrades, additions and other improvements really start to count. The size and number of rooms and bathrooms are noted and any special amenities or upgraded fixtures. The appraiser documents any additions, such as patios or decks, a garage, finished basement, new windows or roof and any extra bedrooms or bathrooms.
Preparing
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Whether you are having a professional appraisal done at a lender's request for a home purchase loan or refinance loan or because you are selling your home, it is generally a good idea to prepare your home for the appraisal. In most cases, you are hoping for the highest valuation possible, and as such, you should prepare your home for an appraisal in the same way you would present it to potential buyers. Appraisers are trained to look past any mess and clutter and strictly evaluate the structure and features of the home, but a little bit of cleanup cannot hurt. It is beneficial to do some general yard cleanup or hire a landscape maintenance company for a one-time job. Touch up with fresh paint and take some time to de-clutter the inside.
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