Jody Tucker
Real Estate

The Appraisal Process

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February 27, 2023

I’m Jody.
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What is an Appraisal?

Whether you’re buying or selling a home, a critical step of the process is the home appraisal. An appraisal is an unbiased, professional estimate of the value of a property for sale. It is required by lenders. Lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate. The appraisal can include recent sales information for similar properties, the current condition of the property, and the location of the property, i.e., insight as to how the neighborhood impacts the property’s value.

What’s the Difference Between an Appraisal and an Inspection?

An appraiser does not necessarily look for potential defects in the home. That’s the responsibility of the home inspector. You hire an inspector directly if you are purchasing a home and want an itemized report of potential repairs or problems with the property. The appraiser, is ordered by the lender, instead focuses on whether the home’s agreed-upon purchase price is in line with what it is worth.

Who Pays for the Appraisal?

The Buyer is typically required to pay for the appraisal. The cost appears on the Closing Disclosure as part of your closing costs. You do not need to complete appraisals on every house you choose to bid on.

Who Appraises the Home?

Appraisals are conducted by highly-trained professionals who are licensed and/or certified to determine the value of a home fairly, objectively and without bias in the state where the property is located.

What are Appraisers Looking For?

Appraisers are looking at the condition of what’s permanently part of or attached to the house. They’re not evaluating the décor or furniture or anything that’s not affixed to the property. What’s most important are your home’s physical characteristics (age, square footage, the number of bedrooms and baths, lot size, location, view) as well as their observable condition.

Can I Boost My Appraisal Value?

If possible, review previous appraisals. Look for issues that lowered your home’s value in the past and address those problems. Collect important documents for the appraiser. These could include a land survey that verifies property size, proof of your home’s most recent sale price and a list of recent improvements complete with receipts.

Prepare for the Visit

  • Clear clutter and contain pets to make the inspection easier for the appraiser.
    Tidy up. Simple landscaping choices.
  • Invest in curb appeal. Simple home maintenance. Clean the landscape, clear debris from your yard, trim the hedges, and clean the gutters to make your home more attractive.
  • Make minor repairs. If you have plaster cracks, water-stained walls, soiled carpeting, pests, or persistent odors, you might want to do your best to resolve those issues.
  • Appraisers often value houses in $500 increments, so if there’s a repair over $500 that can or should be made, do it. Fix leaky faucets, broken windows and cracked ceilings.
  • Check your curb appeal. Overgrown landscaping and broken garage doors will work against you and your appraisal. Outdoor space has become an important thing since covid. Make sure they are in tip-top shape.
  • Itemize your improvements. Jot down the repairs and updates you’ve made over the years, when you did them and how much they cost. This helps to validate your list price. It also helps to remember these items that an appraiser might not notice, like a new roof or insulation. Even minor items like a new kitchen sink count too.
  • curb appeal

  • Don’t show your age! The newer your home appears to be regardless of its actual age — the better. Bring carpet, tile, windows and other permanent fixtures into the 21st. (www.discover.com/home-loans/articles/the-home-appraisal-process/)
  • What if I am Not Happy with the Appraisal Outcome?

    If you are not happy with the appraisal once you receive it with all supporting documents, you can challenge it if you think it’s inaccurate. This is definitely frustrating. Make sure you understand how the value was created before challenging it.

    First, get your own copy of the report. Second, check for any mistakes. Everyone’s humans, so double check details. Lastly, maybe you’ll find some issues with the homes that the appraiser compared yours with. One more thing about appraisals, make sure if you built an addition or an improvement, that you had the correct permits. If not done, they cannot be included in the appraisal.

    So, with your argument in hand, you can try to see if the appraiser will take another attempt at appraising your home. In most cases, you will ask for reconsideration through the bank or lender that hired the appraiser.

    Disclaimer: I am not an attorney. This is not legal advice. Please contact an attorney if you think you need legal advice.

    Resources

    https://www.discover.com/home-loans/articles/the-home-appraisal-process/

    https://www.statefarm.com/simple-insights/residence/raise-your-homes-worth-with-these-simple-appraisal-tips

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    Jody Tucker has been a MN Licensed Real Estate Agent for 4 years. She has a strong love for homes and for helping join people with the perfect home that suits their lifestyle. 

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