Whether you are looking to sell your home, or in the process of buying a new one, the sale of property with the assistance of a bank loan almost always requires the servicese of an appraiser. An appraiser is essentially a home inspector who uses the information they gather about the home in very specific ways, as dictated by their code of ethics and professional standards. In fact, the appraisal is one of the keys that allows or prevents a loan from funding.
Once the home is inspected, inside and out, the appraiser will use the information to analyze the value of the property as-is. This analysis is based upon a multitude of comparisons against other properties that have already sold, the cost of re-building the structure and/or the availability of other properties in competition with the subject property. The condition of a property will either allow the property to meet the asking price or not.
The second analysis to be done by the appraiser is to look for safety violations in the home that the bank’s lending guidelines have on a list. These items, if not up to the lending program’s stated guidelines, will prevent funding.
In the case of the property falling short of the value mark, if the property could be valued higher if certain repairs were to be performed, the appraiser will usually give a value to those repairs in the report and suggest they be completed.
In the case of a listed safety issue, the appraiser will list the items that the bank will require to be changed in the appraisal report as well. Those items are special guidelines given to him or her by the bank as to what would disqualify the property. They are not mysterious to most contractors; they follow the standards in building, such as railing measurements and the depth of steps.
Of course, there exist the special attributes that a homeowner has no control over, such as location, view, and amount of land that goes with the house. However, there are many items that can make or break an appraisal.
The roof, siding and foundation are key to the value of a home, but the interior of the home is very important a well, when assessing value. Additionally, the overall appearance of the home is important. Before the appraisal, it is important for the homeowner to clear out any leftover building materials and items that have no use. Neat and clean goes a long way to the overall impression of the property. Unsightly or damaged items should be removed.
Here is a list of items that will be analyzed as part of any appraisal:
- Foundation (Materials used, installation, condition)
- Roof (Materials used, installation, amount of usable life left)
- Siding (Materials used, installation, condition)
- Decks (Materials used, measurements of railings, balusters, steps & decking/supports analysis)
- Windows (Condition of Glass, Insulated? Metal -vs- Vinyl Frames, overall condition)
- Ceilings (Materials used, installation, condition)
- Doors (Materials used, installation, amount of usable life left)
- Floors (Condition of floor & Flooring materials used, installation, amount of usable life left)
- Walls (Building materials, installation and paint)
- Plumbing (Pipe materials, Leaks, Drain effectiveness, hot water heater evaluation)
- Electrical (Power box, outlets, proper wiring, safety check)
- Interior / Exterior Paint (coverage, amount of usable life left)
- Appliances (Age and condition) Insulation (Age and condition)
- Pest Activity (Active Pest Activity)
- Driveways / Walkways (Condition, Slope, Materials used)
- Stairs / Steps (Railings, Spacing of Steps & Balusters, Condition, Materials)
- Exterior Landscaping (Lawns mowed, overgrown bushes trimmed, unsightly junk removed, etc… as nice as possible)
This list is not a complete list, but does give the major items that will be scrutinized.
© Sarah Johnson, Broker