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Appraisers: What Are They Looking at Anyways?

Appraisers: What Are They Looking at Anyways?

If you think about it, appraisals are a big deal. If you're trying to buy a home, and the appraisal comes in lower than the selling price of the home, it could bring both you and the seller back to the negotiation table. And, if you're trying to refinance, a high appraisal might help you qualify for a lower rate. Why? Because an appraisal determines how much your home is worth and thus decides the loan amount needed to buy a house, and the loan-to-value when refinancing a home.

Since appraisals can have an impact on your financials, why not find out what an appraiser is looking for and do anything you can to make a difference.

What Does an Appraiser Look At?

The Neighborhood

The truth of the matter is, the appraiser has a good idea about the value of your home before even stepping inside. Often an appraiser will research the neighborhood beforehand to take a look at other homes so as to make a good comparison.

After the physical appraisal, which can take anywhere from 15 minutes to a couple hours, depending on the size of the home, the appraiser will likely continue his research and use multiple sources to continue with the comparison. Some of the sources an appraiser might use include the local Multiple Listing Service, tax assessors, county courthouse records, vendors, etc. to complete the full appraisal report.

The Structure

Before even stepping inside your home, the appraiser will take a look at the overall structure of the property including the foundation, roofing, lot size, location, view, and will determine the material, quality and condition of each. The larger the lot size, the higher the appraisal will be. Same goes for quality; if the home was built with higher-quality materials, the higher the overall value of the home. He will also examine

When inspecting the exterior, the appraiser will note any cracks, damages, leaks, upgrades, added features, etc. to determine structural integrity, code compliance, age, and deterioration.  

The appraiser will estimate the gross living area or GLA, by measuring the exterior of the home, excluding non-living areas such as garages, basements or covered porches. These non-living areas are considered and accounted for in value separately.

The Interior

When thinking about what the appraiser will be looking at upon entering your home, think about everything that would be left behind if you were to move. Anything that you would take with you will not be considered by the appraiser.

With that in mind, the appraiser will be looking at the material and quality of the walls, the flooring, and the number, type and quality of windows and doors as well as permanent fixtures, appliances, plumbing and light fixtures. He'll also be looking for modern conveniences such as central air conditioning, smoke detectors, a fireplace, a security system, solar panels, etc. These extra features will likely give your home a higher value. 

If you're able to walk around with the appraiser, it may be prudent to point out any upgrades you have made to your home since you moved in. Any remodeling that you've done to the kitchens, bathrooms, etc. will likely influence the appraisal in a positive way.

Back/Front Yards

The appraiser will consider outdoor amenities and permanent fixtures such as an in-ground swimming pool, sprinkler system or gazebo. Above-ground swimming pools and small sheds are not permanent structures and therefore will likely not be included in the valuation.

What Can You Do to Make a Difference?

The sheer physical appearance of your home has little to do with your home's overall value; however it can influence the appraiser to a certain degree. The front yard is the first thing the appraiser will see, and can set some expectation. The last thing you would want is for the appraiser to see an overgrown yard, strewn with old junk as soon as they drive up.

If your home has a bit of clutter, that's nothing to worry about, as they'll ignore everything that would be left behind, should you move.

However, you can take a look at your home and see what improvements can be made within time frame and budget. Try to see your home from the eyes of the appraiser. And although the appraiser focuses on the overall structure components of your home, they will report on the overall appearance and maintenance level of the home.

Also, try to keep "Sparky" on the leash and out of the way, don't let the family dog become a nuisance to the appraiser.

How low will your payment be?