A home appraisal is a necessary part of purchasing and selling a home. Sellers should understand what appraisers are looking for and make any improvements or corrections, and buyers should understand the appraiser's role in their pending purchase.

This guide will take you through the appraisal process, what to expect based on the 澳洲幸运5官方开奖结果体彩网:type of loan being used, and what you can do as a homeowner to address issues and maximize your home's value.

Understanding the Appraisal Process

Once both parties in a real estate transaction agree on a deal, the buyer's lender usually selects an appraiser. Once the appraiser is selected and hired, they will assess the home and property for its 澳洲幸运5官方开奖结果体彩网:current market value.

The appraiser will assess the exterior and interior of the home,🦄 taking pictures and noting any improvements or renovations made sinc♐e the last sale.

Once the physical assessment is complete, the appraiser reviews 澳洲幸运5官方开奖结果体彩网:comparable home sales in the neighborhood ♚or surrounding area and/or estimates the cost of building the home on the property using current land value.

Once complete, the appraiser creates an appraisal report summarizing how they established the value, usually using the 澳洲幸运5官方开奖🦂结果体彩网:Uniform Residential Appraisal Reꦉport. Reports include sketches, pictures, a breakdown of features, property history, and lists of comparable properties with photos. The appraiser also provides a copy of their license and descriptions of issues.

Role of the Appraiser

The appraiser's role is to establish a fair market value for the home. Appraisers work for the lenders (even though buyers pay for their valuation) to provide an 澳洲幸运5官方开奖结果体彩网:unbiased and fair property ass🔴es𓃲sment.

Preparing for a Home Appraisal

Depending on how well you cared for the home you're selling, preparing for a 澳洲幸运5官方开奖结果体彩网:home appraisal can be time-consuming and possibly expensive. Some things you can do to pre🐠pare are:🧔

• Tidy up the property and give the yard a good grooming
• Make any major and minor repairs
• Collect any documents for the appraiser, such as proof of repairs or upgrades

Key Areas of Focus

If appraisers find any of the following issues, they must be addressed before your 澳洲幸运5官方开奖结果体彩网:mortgage is approved. These can be negotiated as closing conditions if you're buying a home, or they may stꦑop your purchase complete🌱ly. If you're selling, they should be addressed before placing your home on the market:

• Termites, mold, or abnormal settling
• Unpermitted additions or installations
• Roof leak or damage
• Inadequate electrical or plumbing fixtures
• Environmental hazards

Types of Loans and Their Appraisal Requirements

Conventional Loans

Conventional loans are loans from lenders like banks. In most cases, the following will be assessed by an appraiser on a 澳洲幸运5官方开奖结果体彩网:conventional loan:

• The lot and home size
• The home's condition (e.g., water or structural damage)
• Landscaping
• Foundation quality and state
• Roofing quality and state
• The number of rooms, bedrooms, and bathrooms
• Electrical and plumbing quality and state
• Appliance quality and state
• Fireplace numbers, quality, and state
• Sprinkler systems or pools
• Any upgrades you've performed
• Interior finishes, such as hardwood floors and countertop materials
• Exterior finishes, such as decorative shutters and siding type

FHA and USDA Loans

For Housing and Urban Development loans from the 澳洲幸运5官方开奖结果体彩网:Federal Housing Authority and the U.S. Department of Agricul𝔉ture, appraisers must evaluate these additional requirements:

• Lot drainage that directs water away from the home and lot
• Step and stairway handrails
• Issues with the foundation
• Ventilation in the attic, crawlspace, and other areas requiring ventilation
• Heating, plumbing, and electrical systems

VA Loans

Veteran's Benefits Administration loans are 澳洲幸运5官方开奖结果体彩网:mortgages guaranteed by the VA that come with several benefits for veterans. The VA chooses appraisers from its appraiser pool, who ensure the home meets the VA's minimum property requirements and conventional loan items.

Here are some of the minimum requirements appraisers look for (there are 42), which are important if your buyer is using a VA loan, because the appraiser must assess whether the home is safe, structurally sound, a🎐nd sanitary, factors which can also affect its value:

• Sufficient space for living, sleeping, cooking, dining, and a bathroom
• Not have more than four units sharing laundry, storage, and a utility room
• Must have separate shutoffs for water main, sewer, gas, and power
• A correctly sized mechanical system that is unexposed and in good condition
• Electricity with no exposed wires for lighting and the necessary equipment
• Permanent heating capable of at least 50 degrees Fahrenheit in areas with plumbing to prevent it from freezing.
• Air conditioning is not required in mild climates, but it must work if installed.
• Identify unvented gas fireplaces or fueled heaters. An HVAC technician must certify that an approved oxygen depletion sensor has been installed, or the veteran must acknowledge in writing that the VA has not inspected the systems.
• City or well water supply must be continuous and safe for drinking from the source. Must be a water heater present
• Wells must supply enough water, with protected connections and maintenance agreements.
• Public sewer or septic must be connected with waste flowing safely
• Free from encroachments
• Safe and sufficient access to a public street and access roads must be protected by 澳洲幸运5官方开奖结果体彩网:an easement and maintained by a homeowner's association or maintenance agreement
• Proper drainage away from the lot
• Soil conditions and observable surface instabilities (e.g., near fracking sites, sinkholes, settlement issues)

Common Issues and How to Address Them

One of the most common issues faced in real estate sales is appraisal values that lower (bad for the seller) or raise (bad for the buyer) the home's market price. Market conditions will dictate the value of homes, so if overall 澳洲幸运5官方开奖结果体彩网:housing prices are down, buyers will benefit while sellers won't get as much as they'd hoped or lose money. If you're worried about low home prices, you might neeꦬd to wait until the market picks back up to sell your home (if possible).

If market conditions are up, sellers will benefit and buyers will pay more for houses. If either of these conditions presents itself, the parties must renegotiate, accept a loss or lower price (seller), or find more financing (buyer). It's important to note that lenders generally won't provide a buyer with more than a home's 澳洲幸运5官方开奖结果体彩网:appraisal price. If you're ♕purchasing a home and can wait for the 💞market to come back down, you could save some money by waiting.

Appraisers might not use accurately assessed comparable properties, which can skew values. They might also make mistakes in math or other portions of their assessment. Suppose you feel that the appraisal value was inaccurate based on sales of comparable homes in your area or other mistakes. In that case, you can dispute it with your lender, hopefully resulting in a reconsideration of value.

Maximizing Home Value for Appraisal

The most important thing you can do to 澳洲幸运5官方开奖结果体彩网:maximize your home's value is to keep records of all of your maintenance and improvements. While not everything you do will 澳洲幸运5官方开奖结果体彩网:increase your home's value, it can all be fair game—you never know what an appraiser might place more value on. Provide the appraiser with the documentation by l𒁃eaving it on a kitchen counter or giving it to them if you're present.

Kitchen and bathroom remodels are heavily advertised ways to improve home value, as are finished basements. All repairs should be made before a home is appraised. The interior should all be p🍰rofessionally repainted, and a deep cleaning should be performed by professionals to give your home a shine for prospective buyers.

澳洲幸运5官方开奖结果体彩网:Exterior improvements help attract potential buyers. Landscaping, new garage doors, new 𓃲trim, and replacing decorative shutters a꧑re quick improvements that can create appeal.

The Bottom Line

Home appraisals are a stressful part of buying or selling a home. As a seller, you can make it less stressful by ensuring your home is appraisal-ready and attractive to buyers. As a buyer, your lender will only give you the home's appraised value, and it's important to read the appraisal report to learn about the property.