In today’s turbulent real estate market, an appraisal can make or break the sale of your home. Yet, appraising is far from an exacting profession. Here are a few things to know about appraisals so that the house you are buying or selling is valued properly:
1. An appraisal is one person’s opinion. During our 25 years in business, New American Homes has found that appraisals on the same property can vary greatly. The opinion of one appraiser does not necessarily match the opinion of another.
2. Qualify your appraiser. When the appraiser calls to make an appointment to view your property, ask if he or she is familiar with your neighborhood. If not, call the lender and ask that an appraiser with “geographic competency” value your home.
3. Be proactive with your appraiser. Be prepared to give the appraiser favorable comparables (or “comps”) from your neighborhood. Point out properties that have sold recently and compare well with your property. Tell the appraiser how these comps are better or worse than your property – for example, does your home have more bedrooms, an updated kitchen, a finished basement, more square footage, a preferred location?
4. Identify foreclosures. Be sure that, if an appraiser is using a foreclosed property as a comp, this fact is properly noted and the condition of the foreclosed property is known. (Many foreclosed properties are “stripped” before they are sold, and the recorded sale prices do not take into consideration the cost of bringing the properties back to a livable condition.)
The following link from AOL’s real estate blog, “Inside the Mind of an Appraiser,” is an excellent short video on how an appraiser looks at a home: Inside the Mind of an Appraiser