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\n <\/div>\n \n Start With a Free Home Value Estimate<\/h3>\n
Enter a few details about your home, and we\u2019ll provide you with a preliminary estimate of value in less than two minutes. This won\u2019t replace a home appraisal, but it can be a helpful starting point.<\/p>\n \n
What is a home appraisal?<\/h2>\n
A home appraisal is a professional\u2019s opinion of what your home is worth in the current market condition.<\/p>\n
It consists of two major sets of information to determine an accurate value: A walkthrough inspection of your property and an examination of the comparable homes in your area (called comps<\/a>). The inspection itself can take 15 minutes to several hours, depending on the size and complexity of the home. To complete the whole appraisal process, you\u2019re looking at a few days to a few weeks<\/a>.<\/p>\n Appraisers always start with the inspection to get a clear idea of what the product is that they\u2019re making a valuation on. They need to confirm the layout of the home and rate its overall condition. Special consideration will be given to any safety concerns or big ticket items like the foundation, roof, and HVAC system (heating, ventilation, and air conditioning).<\/p>\n \u201cI\u2019m determining what upgrades they have, what the condition of the house is, and what the quality of the construction is,\u201d said Steven Crane<\/a>, a state-licensed real estate appraiser with 20 years of experience in Arizona.<\/p>\n To reach an informed and comprehensive valuation for a home, some specific data need to be gleaned.<\/p>\n Appraisers first identify \u2018comparable\u2019 homes <\/a>to yours that have recently sold within your general area so they have an idea of how much buyers have been paying for like-kind properties.<\/p>\n A good comp would be a similarly-sized home in your neighborhood that sold within the last couple of months and has most, if not all, of the same features as your home.<\/p>\n Using the comps available, appraisers will tweak their valuation of your home by assigning dollar amounts to certain features that don\u2019t quite match up and then add or subtract those items from the overall estimate. An example would be if a comp property has a fireplace and your home doesn\u2019t, then the appraiser might subtract the average cost of a fireplace from your home\u2019s value.<\/p>\n Some appraisers also factor in market trend data to make their valuations as current as possible. This sale time adjustment takes into consideration how long ago a good comp sold and accounts for the appreciation<\/a> or depreciation<\/a> that occurred in the housing market since then. So if a comp sold two months ago and the home prices in the area have gone up about 12% over the last year, then an appraiser might add about 2% onto the value to adjust for the market change.<\/p>\n Certified appraisers most commonly use the Uniform Residential Appraisal Report <\/a>when determining a home\u2019s value.<\/p>\n The report directs the appraiser to look at the quality and condition of both the interior and exterior of the home. This includes such things as the foundation, the roof, the walls, the water drainage on the property, the window type, and the floors.<\/p>\n They\u2019re also looking at amenities (i.e. pool, fireplace, patio\/deck, fence), and appliances (i.e. refrigerator, range\/oven, dishwasher), as well as any health and safety concerns, such as evidence of infestation<\/a> or dampness.<\/p>\n \u201cOne thing we need to inspect is water heaters,\u201d Crane said. \u201cWater heaters are not necessarily a safe item if it fails because you have high-pressure hot water that can potentially cause damage to another human being.\u201d<\/p>\n Some of the other characteristics an appraiser considers when determining a home\u2019s value include:<\/p>\n Preparing for a home appraisal is similar to preparing for a visit from prospective buyers. The main difference is appraisers aren\u2019t looking at your furniture or decor.<\/p>\n \u201cDon\u2019t worry about your personal property,\u201d Crane said. \u201cLook at health and safety items.\u201d<\/p>\n If there are any exposed electrical wires, cover them up. If your porch is missing a handrail, try to have one installed. Make sure your smoke detectors<\/a> are working. Make sure your water heater is installed properly. Make sure your garage door closes.<\/p>\n \u201cDon\u2019t try to hide anything, because we\u2019re going to look behind every door and into every space,\u201d Crane said. \u201cYou\u2019ll also want to have an explanation for any evident damage to your home.\u201d<\/p>\n It\u2019s also important to let the appraiser know what improvements you\u2019ve made to the property in recent years. This can be done by telling the appraiser directly or leaving a packet of information for the appraiser to see when he or she visits.<\/p>\n \u201cIf [the homeowner] has done a bunch of updates, either I type it out or they\u2019ve left things on the counter showing what all\u2019s been done,\u201d said Linda Williams<\/a>, a top-selling real estate agent in Fort Wayne, Indiana who sells properties 50% faster than other agents in her area. \u201cLike, \u2018We\u2019ve just had new granite countertops put in this year\u2019 or \u2018The bathrooms have been remodeled\u2019 or \u2018The kitchen has been updated.\u2019\u201d<\/p>\n Some other things to do before the visit include:<\/p>\n While not required, being home during the appraisal can be a good idea.<\/p>\n The appraiser may need your help gaining access to certain areas of your home or have questions about the property, such as if there have been any notable improvements in recent years that aren\u2019t obvious (i.e. a new HVAC or septic system).<\/p>\n One thing you\u2019ll want to be conscious of, however, is not to follow the appraiser around or distract them with conversation.<\/p>\n \u201c[Homeowners] can actually diminish the quality of the appraisal if they\u2019re trying to engage you during the inspection,\u201d Crane said.<\/p>\n If a homeowner is present and interested in talking, Crane will usually request that they speak after he\u2019s done looking around and taking pictures.<\/p>\n \u201cThat\u2019s when they can describe to me what they feel is important to know about their house,\u201d he said.<\/p>\n When a buyer applies for a loan, the mortgage lender makes arrangements for an appraisal through what\u2019s called an appraisal management company (AMC)<\/a>. By ordering through a third party like this, it ensures the assigned appraiser is independent of the borrower, lender, and seller.<\/p>\n Though the lender files the request with the AMC, it is typically the responsibility of the person borrowing money (or refinancing) to pay the appraisal fees.<\/p>\n From a strictly professional standpoint, a messy house does not affect an appraisal. What an appraiser really pays attention to is the quality and condition of the \u201cbones” of your home.<\/p>\n \u201cIf it\u2019s generally in a cluttered state, that doesn\u2019t make any difference,\u201d Crane said. \u201cBut if someone has obviously neglected the house and there\u2019s a significant amount of deferred maintenance, that would affect the condition rating and that might affect the value.\u201d<\/p>\n Appraisers are human, however, so walking through a home that\u2019s in disarray can have a psychological impact on the appraiser’s impression of the home\u2019s condition and may lead them to ask more questions, says Williams.<\/p>\n \u201cSo I usually just say keep it show-ready when the appraiser comes,\u201d Williams said.<\/p>\n It\u2019s fine to be informative about your home and the neighborhood, but it\u2019s generally not a good idea to discuss your home\u2019s value with the appraiser. An appraiser\u2019s job is to be an objective valuator of real property.<\/p>\n When a homeowner tries fishing for how much the appraiser thinks the home is worth during the walkthrough, or pressures the appraiser in any way to reach a certain valuation, it can leave a bad taste in the appraiser\u2019s mouth.<\/p>\n \u201cThey already know they have the pressure from the agents wanting to get through the appraisal stage, so they don\u2019t need additional pressure from anyone else,\u201d Williams said.<\/p>\n This is especially true if the appraiser feels like the homeowner was instructed by the home\u2019s listing agent to apply such pressure. Real estate professionals are legally barred<\/a> from trying to unduly influence the outcome of an appraisal. Toying with this delicate balance can potentially interfere with the appraisal process.<\/p>\n A home appraisal is only required when the buyer is using some form of loan assistance<\/a>.<\/p>\n Lenders want to know that the home being purchased is objectively worth at least the amount being borrowed by the buyer.<\/p>\n This serves as a safeguard in case the buyer later defaults on their mortgage and the lender has to foreclose on the property.<\/p>\n If it\u2019s a cash offer<\/a>, then it\u2019s simply the buyer\u2019s choice whether or not to have the home appraised before closing.<\/p>\n If the appraisal comes in lower<\/a> than the agreed-upon price in the purchase contract, then what commonly happens is one of the following: The buyer comes up with extra cash; the seller reduces the price; they meet in the middle; or they cancel the contract.<\/p>\n On occasion, the lender will allow the buyer to order another appraisal, says Williams.<\/p>\n \u201cSome lenders will allow it and some will not,\u201d she said. \u201cThe only caveat is that if it comes in lower, then you\u2019re in a worse position.\u201d<\/p>\n According to data from consumer reporting agency CoreLogic, in a balanced market, it\u2019s common for an average of 7%-11% of home sales<\/a> to see the appraisal come in under the contract value.<\/p>\n The answer to this question depends on the circumstances and who you ask.<\/p>\n \u201cI don\u2019t usually recommend [my clients] getting an appraisal before we go to market just because every appraiser is different and sometimes by the time you go under contract, things have changed in the market, so it\u2019s going to affect the appraisal anyways,\u201d Williams said.<\/p>\n Where a pre-listing appraisal might be more relevant is when your property is unique or in a rural area<\/a> with few comps to work with.<\/p>\n \u201cIt would help [homesellers] out, because an appraiser is going to highlight those health and safety items probably and then they\u2019re going to get a pretty good opinion of what the value is,\u201d Crane said.<\/p>\n An appraisal and an inspection are two different real estate actions that come into play when you buy or sell a home.<\/p>\n The appraisal is primarily focused on valuation, or what your home is worth, while a home inspection<\/a> is an assessment that examines the structural safety and condition of a property.<\/p>\n Where the lines sometimes blur is when an appraiser notices a health and safety concern through what Crane refers to as \u201ccasual observation.\u201d<\/p>\n \u201cIf I can see it by casual observation, then I\u2019ll make note of it in my report,\u201d he said.<\/p>\n Crane doesn\u2019t always have the expertise to confidently say whether or not something is unsafe, in which case he\u2019ll recommend a professional take a look at it.<\/p>\n Having a clear understanding of how an appraisal works can make a significant difference in how smoothly your home\u2019s appraisal goes.<\/p>\n Just keep in mind that all appraisals consist of an inspection and an examination of comps. Both play an equal role in how your home is valued, so neither should be neglected. If you\u2019re not in a rush to sell your home, you may wish to try timing the sale soon after a few comparable properties in your neighborhood are sold. This will ensure any appraisal will have strong evidence to support an accurate valuation.<\/p>\n A skilled real estate agent can help with strategies like this<\/a> by tracking the market in your area and letting you know when the iron is hot. HomeLight\u2019s Agent Match<\/a> platform can connect you with a top-performing agent. The free tool analyzes over 27 million transactions and thousands of reviews and takes just two minutes to match you up with top agents in your area.<\/p>\n Header Image Source: (Henry McIntosh \/ Unsplash)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" A step-by-step explanation of what an appraisal consists of and how to prepare for it. Use this knowledge to get the most out of your home\u2019s appraisal. <\/p>\n","protected":false},"author":317,"featured_media":32798,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","cybocfi_hide_featured_image":"","footnotes":""},"categories":[319,330],"tags":[733],"class_list":["post-32796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-selling-advice","category-house-value","tag-how-is-home-value-calculated"],"acf":[],"yoast_head":"\nWalkthrough inspection<\/h3>\n
Appraiser research<\/h3>\n
What do home appraisers look for when they visit my house?<\/h2>\n
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What hurts a home appraisal?<\/h2>\n
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How should I prepare for a home appraisal?<\/h2>\n
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Should I be present for the home appraisal?<\/h2>\n
Who pays for the home appraisal?<\/h2>\n
Does a messy house affect an appraisal?<\/h2>\n
What should I not say to the home appraiser?<\/h2>\n
Is a home appraisal required?<\/h2>\n
What if my appraisal comes in low?<\/h2>\n
Should I consider a pre-listing appraisal?<\/h2>\n
What\u2019s the difference between a home inspection and a home appraisal?<\/h2>\n
Get the most out of your home appraisal<\/h2>\n