What Do Appraisers Look For When Determining A Property’s Value?

Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property.

A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection.

However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property.

The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property.

While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling.

The Key Components Addressed In An Appraisal

The Site:

Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features…

Design:

Quality of construction, finish work, fixed appliances and any defining features

Condition:

Age, deterioration, renovations, upgrades, added features

Health & Safety:

Structural integrity, code compliance

Size:

Above grade and below grade improvements

Neighborhood:

Is the property conforming to the neighborhood?

Functional Utility:

Is the property functional as built – style and use?

Parking:

Garages, Carports, Shops, etc..

Other:

Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home.

When entering your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items.

Be sure to have all carbon monoxide and smoke detectors in working condition.

Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing.

If you’re interested in what specifically appraisers are looking for, here is a copy of the blank 1040 URAR form that is used by every appraiser in the country.

Related Update on HVCC:

Appraisers hired for a mortgage transaction on a conforming loan are chosen from a pool of qualified appraisers at random. Neither you nor your lender has the flexibility of deciding which appraiser will inspect your home.

This recent change was brought on with the Home Valuation Code of Conduct HVCC, and is effective with conventional loans originated on or after May 1, 2009.

_________________________________

Related Appraisal Articles:

March 29, 2010 by · Leave a Comment

Related Posts

About Allen

Allen is President and Founder of First Trust Mortgage, a family owned, 15 year old, mortgage planning firm in Fort Lauderdale, Florida. First Trust Mortgage was founded in 1996 and provides residential mortgages in Florida. Allen's vision for First Trust Mortgage was based on two principles. First was to help his clients make informed decisions regarding residential mortgages. Second was to build long lasting relationships with his clients and referral partners. Over the past 5 years Allen has concentrated his education and efforts in the area of managing Real Estate equity through mortgage planning. Allen was one of the first certified mortgage planning specialists in the State of Florida and is a regular guest of Steve Pomegranate's "On The Money" radio program on NPR and Ray West's "Talk About Money" radio program on WAFG. Allen also teaches continuing education classes to certified financial planners and insurance professionals around the subject of managing equity in real estate. Allen graduated from the Pennsylvania State University in 1983. Allen has been lending in Florida since 1985 when he joined Great Western Bank (Washington Mutual) managing the company's Florida Commercial Real Estate Mortgage operation. In 1996 /1997 Great Western Bank was sold to Washington Mutual and Allen formed First Trust Mortgage Corporation. In 2003 Allen focused his practice on Strategic Real Estate Equity Management and is considered to be an expert on that topic. Allen practices personally the concepts he shares with the clients, peers and financial service providers. Allen exclusively participates in the residential mortgage industry and has purposely chosen to hold no other licenses even though he has participated and passed the class requirement for the Florida Real Estate Commission, Florida Mortgage Broker, Health, Life & Variable annuities license. Specialties Helping Consumers, Realtors and Financial Service Professionals Keep Current On Mortgage Trends and Provide Mortgage Solutions As Needed. In Addition I Love To Educate Seniors On The Use of Reverse Mortgages and First Time Homebuyers On How Much Payment Is Enough.

Leave a Comment