The purpose of a home appraisal is for the appraiser to get firsthand information about the house’s location, condition, quality of its construction, the house’s facilities, and unique features that might affect the property’s value. The appraiser then compares these and other features to similar houses that have been recently sold in the area. It is the comparison that finally determines the house’s value and marketability.
Here are the factors that real estate appraisers look for:
The standard report of appraisal includes external features about the home: its neighborhood boundaries, census tract, and other legit definitions. Other external features include:
- Size of the lot
- Whether the home has public services
- Neighborhood features (that is, rural, suburban, urban)
- Zoning classification
- The kind of driveway and any vehicle storage. For instance, “is there a two-car garage versus a one-car garage? Those have worth, particularly with the hot sun.
Much information might be grounded at numerals: room sizes, measurements- a lot of things that you cannot really modify, according to Santiago Valdez, an agent at Compass for fifteen years who specializes in homes with an average value point of two hundred and fifty-eight thousand dollars.
Santiago and other agents choose to be present during the time for appraisal to highpoint any special and quirk features about the home. In Chicago, for instance, a single-family home is nineteen feet wide. In case you have a home that us twenty feet wide or twenty-eight feet wide, you need to ensure that you raise that up to the property appraiser. That is going to be a bit different, mainly in an area like Chicago that has twenty-five-foot loots, explains Santiago.
Here, the property appraiser checks closely at the size, condition, and structure, including:
- Foundation type
- Materials utilized for the windows, floors, and walls.
- Whether there is a partial or full basement, attic or crawl space
- Remodeled vs. updated baths/ kitchen
- Number of bedrooms and bathrooms
- The house’s square footage
Although the real estate appraisers are not pest and insects inspectors, he will note if he sees some elements of termites, like termite dirt on the windowsills.
A VA and FHA mortgage also will need an appraiser to put down safety information, such as whether there are smoke detectors and handrails on the stairways. Santiago explained that he likes to call attention to drawbacks and features that may not be so obvious during the property appraiser’s assessment. For example, he will note if the home receives good natural light due to the higher ceiling or number of windows. “Light in a place like Chicago is greatly vital,” he explained.
Likewise, Santiago likes to put down if a house that has vended at a lower price is not near to noisy air acclimatizing unit or much light- something a property appraiser would not notice during winter seasons.
The general condition of the home
Real estate appraisers will inspect and note on:
- The conditions and material of the walls, floors, and trim
- General upkeep and maintenance, like whether there are leaky faucets, peeling paint, and missing door handles, among others.
- Any adverse conditions and physical deficiencies that affect the home’s livability and structural integrity
- The conditions and materials of the foundation and external walls, the screens, roof surface, downspouts, and gutters.
What real estate appraisers look for: house improvements, additions, and upgrades:
A real estate appraiser inspects on the necessities like the kind of cooling and heating systems a house has. They also take into account any additions, upgrades, and facilities such as:
- A porch
- A deck or patio
- Wood stoves and fireplaces
- Energy-efficient items
Additionally, an in-ground swimming pool is an added value, though it is depreciated value due to the maintenance needed, Huston explained.
Specifically, spending one hundred and twenty dollars on an in-ground swimming pool does not guarantee a bigger appraisal worth compared to your neighbor’s thirty-five thousand dollars pool. According to Fonseca, if you choose to resell, you are not going to get one hundred and twenty dollars for your swimming pool. “You both have a functioning swimming pool. It does not really rely on who spent more cash”.
What carries more significant weight are upgrades, mainly on older houses, such as an air-conditioning system and a new roof.
“Most of the time a property appraiser will come and check on an air conditioner, and they will note its age or will look at the permits,” Fonseca explained. “But it is different when you explain to them that this system was just installed, and it is a Trane air conditioner, and it cost seven thousand dollars. And we just changed the roof last year, and it costed this much cash.”
Having paperwork and receipts handy for other restorations also can assist the real estate appraiser in adjusting accordingly, Santiago added. “It is very hard to understand the difference between the sixty thousand dollars cabinets and fifteen thousand dollars cabinets if you are not sure what you are looking for.”
Mobile features and décor
While real estate agents like a neutral décor to assist clients in imagining their stuff in a house, a house’s general aesthetic is not a big factor on an appraiser’s list of inspection value.
Bahamian shutters, all-updated ceiling fans- none of those things add value. It is all considered as individual property, Huston explained. A typical law of thumb is, if it is nailed down and you cannot remove it, then it is well thought to be part of the home.
A new microwave does not add value a well, for example, because it is portable. Neither does a hot tub, or a utility shed.
That said, “Individuals do not eliminate hot tubs,” Huston added. Although such a system may not add market worth on the appraisal report, an agent would say it accounts for marketability.
The Bottom Line
When everything works out smoothly, the house appraisal is just an extra box to the closing checklist. When the value of the appraisal is lower than expected, the deal can be canceled or delayed. Despite the situation you come across in your house buying, refinancing, or selling experience, a rudimentary understanding of how the appraisal procedure functions can be of great importance to you, particularly if you are purchasing your first house.