A home appraiser plays a big part in the majority of homeowners looking to refinance their homes.
In order to secure a better interest rate or pay off their loans, working with a home appraiser can be very beneficial. Moreover, other homeowners may want to lower their monthly payments, whereas some may want to tap into their home's equity to invest in remodels. Whether you're refinancing your mortgage, mortgaging your home, or selling it, a home appraisal is a critical component of the overall transaction.
Regardless of whether you're an owner, buyer, or seller, you'll want to understand what home appraisers will look for when determining your home's value.
What is a Home Appraiser?
A home appraiser is an expert and skilled professional utilizing data to estimate the market value based on an array of different characteristics such as size, condition, location, and amenities.
These professionals will compare your home to other similar properties that have recently been sold in the area. Furthermore, to conduct an appraisal, appraisers should boast adequate licenses and certifications.
Typically, real estate agent appraisers will utilize the Uniform Residential Appraisal Report, a standard appraisal document that they will send back to the lender, after properly filling it. In turn, the lender offering the buyer a mortgage will utilize the appraisal to determine whether they should lend the property in question.
Home appraisers play a vital role in real estate transactions since these are the professional opinion of value based on which lenders make a lending judgment.
How Much Does a Home Appraiser Charge?
Appraisal fees typically vary from state to state. However, one thing remains constant; appraisers will change customary and reasonable fees according to the area. Starting price for a typical single-family home varies from $300 to $500 and goes up from here.
Typically complex and luxury properties are more expensive and take longer to appraiser because inspection takes longer. Buyers have to pay for the appraisal regardless of whether your loan closes or not.
What Does an Appraiser Look for in a Home?
Appraisers need to be appropriately qualified and certified in most states and adhere to the Appraisal Foundation's Uniform Standards of Professional Appraisal Practice.
Depending on your property's condition and size, the appraiser may require anywhere between 15 minutes to three hours to analyze your home. Let's explore what appraisers will look for in your home:
Your home appraiser will conduct a land appraisal to help you identify how much worth your property is. Here are a couple of things they will check:
- Appraisers will check the accessibility of your home. They will also look for unique amenities that increase the aesthetic appeal and value of your home
- The configuration and layout of your home also has an impact on your home's overall value
- The location of your land is another factor appraisers will look into. Here they'll check whether your home is near schools, markets, and so on
- They will also gauge the size and usability of your home
Your appraiser will try to determine your home's fair market value by comparing your property to the similar ones sold in the vicinity.
These comparable properties, otherwise known as 'comps,' are never exactly alike. For this reason, the appraiser will adjust the worth of your home by adding and subtracting the differences between both houses, such as lot size, fixtures, amenities, finishes, appliances, and overall upkeep.
Apart from land value, your home's exterior, and interior, appraisers will also evaluate necessities like your home's heating and cooling system. On top of that, they may also take into account upgrades and amenities:
- Energy-efficient items
- Fireplace or wood stove
- Patio/ deck
- In-ground swimming pools
How Does an Appraiser Determine a Home's Value?
Home appraisers will value your property by doing a walk-through of the house. During this process, appraisers will use either one of the two standard valuation methods; the sales comparison approach or the cost approach.
In rare cases, appraisers may apply a mix of both valuation approaches to determine an accurate value. Home appraisers provide a reliable and appropriate determination of a home's worth.
For these values to be official and trustworthy, the Appraisal Institute requires qualified appraisers to boast certifications and licenses. In addition to this, federal regulations require appraisers to be impartial and have no direct/indirect interests in the transactions. Typically an appraiser's report includes the following:
- An in-depth street map that shows the appraised property and comparable sales
- An exterior building sketch
- An easy-to-understand explanation of the calculations of the square footage
- Photographs of the property's front, back, and street scene
- Front exterior pictures of all comparable homes
- Other critical information like public land records, tax records, and market sales data determines an accurate, fair market value.
Home Appraiser vs. Online Estimator
Home appraisals refer to third-party reports written by professional appraisers who will conduct an in-depth analysis of your home and market research.
On the flip side, an online home value estimator is an online tool/website that provides you with a rough idea of your home's worth. These are typically based on specifications like your address, lot size, age, and square footage.
While online home value estimators are helpful, they are not an appropriate replacement. These tools being able to provide immediate answers, they do not boast the same accuracy that expert appraisers provide on-site visits.
In addition, even though these online estimator tools can provide a rough estimate of your home, these value won't always be accurate since these tools cannot account for the following:
- Unique features
- Recent repairs/renovations
- Add-ons and upgrades
- Local markets
- Nearby attractions and amenities
- Neighborhood attractions
- Future amenities
- Quality of the view
- The condition of the home
Before getting a home appraiser, it's vital you adequately prepare your home for the ideal refinance appraisal. To do so, make sure that your home boasts a decluttered look, has an aesthetic exterior, and boasts electrical appliances and systems.
On top of that, invest in minor upgrades that will increase your home's appeal, research comparable properties to find ways you can improve your home's look. Once you combine all of these factors, you can improve your home's final appraisal value.
This page last updated: March 21, 2022