In most property transactions the word appraisal comes up sometimes more than once.

As a home buyer you may hear the word appraisal, if you are getting a loan to buy your house, an appraisal could be part of the process. Your lending institution may demand an appraisal on the property if it thinks that the house is not worth what you have offered for it.

This is a professional appraisers estimated value. The appraiser will use recent properties that have sold in the area to help determine the value of the home you choose. The appraiser will also consider the condition of your home, age, size and so forth in determining the value. To better understand what an appraisal typically looks like let me list a few parameters: Sales typically can’t be more than 6 months old, further than one mile from the subject property, not larger than about 10% of the subject properties square footage, and what we would refer to as like kind.

If the house is appraised low, your agent may suggest you make a lower offer with the attached appraisal to qualify for your loan. In some cases, the seller may still hold to their original asking price and ask you to pay the difference in cash. It is not likely to receive a loan amount for higher than the appraised value of the home for purchase.

Most residential purchase agreements are based on the appraisal and are negotiated at that time if there is a need to so so. For many, this can be a nerve wracking moment in the process.

The home appraisal process can includes the following:

• A complete walk through of the house to get an idea of the overall condition and room count
• Documentation of the entire condition of the property, both inside and out.
• The Quality of construction and modernization of the home
• An evaluation of the value of the house
• Information on the house, including square footage, and the condition of the garage, carport, or other peripheral properties
• Estimates of the “contributory value,” which is any additions or repairs you have done to the  home prior to listing
• Other attributes of the home which would add to the market value of it

Most homeowners get nervous when it is time for an appraiser to inspect their property. After all, they are about to be judged for the appearance of their home. More importantly, they recognize that the asking price for their home is influenced by the appraiser’s evaluation. Fortunately, a few strategies can make it easier to get through this experience, while helping the homeowner to feel good about this process. If you can be there when the appraisal is going to happen.

Prep the house

Before you allow the appraiser to visit your home, take the time to get it ready. The value of the home depends on more than the number of rooms that it has and the age of the roof. The condition and appearance of your home also influences the home’s worth as suggested by the appraiser.

You should begin by repairing anything that needs fixing. Make a list of all of the problems you see and fix as many of them as you can afford to repair. Some of the repairs that you should tackle include:

• Stained carpets
• Loose woodwork
• Torn window screens
• Chipped paint on the walls or loose wallpaper
• Faulty locks and broken hinges
• Faulty heating and/or cooling system
• Faulty appliances
• Leaky roof

Next, you need to spend some time cleaning your home. A dirty home suggests that other problems with the home could exist, so make sure your home is sparkling clean. Wipe down all surfaces inside the home, including the windows and doors. Be sure to clean up the yard and garage as well. Decluttering your home can make it look roomier. Get rid of anything you do not need and put everything else in its proper place.

Talk with the Appraiser

If you have insider information concerning nearby real estate sales, you should share it with the appraiser. For example, if the couple down the road lowered their asking price considerably to get a quick sale because they were getting a divorce, the appraiser should have this piece of information. Never assume that the appraiser is aware of these kinds of details, and always ask any questions that you have. A home appraisal is an important part of the selling process because it sets a value on your property. This amount is used in determining how much the asking price should be. Therefore, it is important to fix and clean up the home prior to the appraiser’s arrival. Is the appraisor local is a good question to ask.

HOME APPRAISER CREDENTIALS

The typical home appraiser has a license or certification in home appraisal processes from an accredited school or real estate training. This means that they are highly qualified to make an assessment of the final market value of the house. This figure is highly influential to the buyer in communicating how much the home is worth and in determining how much they are willing to  pay.

ONE CAVEAT

It is important to note here that an appraiser is NOT an inspector.  For this reason, he or she cannot do structural assessments, termite checks, under the floor evaluations, or any of the other things the home inspection team can do. This is why it is important to have an inspection completed prior to removing subjects on your home purchase.

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