Posted on: 07th Jun, 2007 10:39 am
Many home owners that have an appraisal done on their house have questions for the appraiser. Here are the top 5 questions home owners usually call my office to ask about.
Top 5 most asked appraisal questions by home owners
Remember, every local market is different! You should speak with a professional in your local market for answers specific to your regional area.
Top 5 most asked appraisal questions by home owners
- Q: Can I get a copy of the appraisal?
A: Yes! The lender should provide you a copy of the appraisal report. Whoever is named on the appraisal as the "Client" is the only person the appraiser is allowed to share or discuss the appraisal with, regardless of who pays for the appraisal. The lender is required by law to provide the homeowner with a copy of the appraisal.
Q. My neighbor has their home for sale for $XXX,XXX, why didn't you consider that?
A. There is a difference between active/pending listings and actual closed sales. Anyone can list a property for sale at whatever price they would like for it but that doesn't mean a typical buyer would pay that price. The appraiser's primary goal is to determine what a typical buyer under normal market conditions would pay for a property. If there is one sale in the neighborhood that sold for 50k over all other sales in the area and there are no noticeable differences, that home is outside of the typical price buyers in the neighborhood would pay and will likely not be used. If all the homes listed for sale are 30k over what all sold sales in the area show, the appraiser does not have evidence a buyer is willing to pay that higher price. The appraiser should use provable facts (closed sales) and not speculate on the market. This rule is broken when values are on a decline. If all closed sales are around 200k, but active listings are 150k the appraiser will consider these active listings heavily because of the substitution factor. Would use buy a new car for 50k when there are 20 other nearly identical cars in the same lot for 35k?
Q. The appraisal only took 20 minutes, why am I charged so much?
A. This is a question appraisers get asked a lot when at the property. The truth is appraisal fees have barely gone up over the past 10 years, far under inflation, the amount of work required by the appraiser has gone up with more liability and competition. The inspection process is a small percentage of the whole appraisal scope of work. I won't go into details, but the remainder of the work includes a lot of data collection, analysis, comparable selection, adjustments, drive time and of course writing the report on the appraiser's findings.
Q. Will my enclosed patio/converted carport/addition be included in the livable SqFt?
A. The appraiser will look for two things. What a permit taken (recorded with the assessor) and does it meet minimal requirements? You should check with the assessor if you do not know the answer. Min. requirements usually include the following; has heating/cooling, is level with the main livable SqFt, has flooring and has electrical and is connected to the main house with access from inside the home.
Q. What improvements will increase the value of my house?
A. This is a tricky question that depends on the neighborhood. Most typically bathroom and kitchen improvements draw the best return on investment but they are both the most expensive to do. Smaller improvements that can help raise the value are paint & lighting fixtures. Be very careful not over improve the property. If 95% of the homes in the area have laminate flooring, installing marble flooring will be an over improvement for the neighborhood and the ROI will go down.
Remember, every local market is different! You should speak with a professional in your local market for answers specific to your regional area.
I applied for a loan with a broker, and he sent out an appraiser. I paid the appraiser a fee. Now I can get a better rate and want to use the same appraisal with another broker. The former broker says he won't allow this. Is this correct? Apparently, I'll need a new appraisal.
that's just awful. you need to raise a ruckus to get the former broker to work with you. good business sense should rule here. apparently the broker is so upset about losing a deal, he's holding you hostage. shame on him.
Consider this situation:
I signed a contract buying a property for 170k.
The appraisal was done after 2 months and appraised for 120k.
The bank does not approve the amount... What happen to my contract?
The seller will must low the property price in order to sell me?
I signed a contract buying a property for 170k.
The appraisal was done after 2 months and appraised for 120k.
The bank does not approve the amount... What happen to my contract?
The seller will must low the property price in order to sell me?
in that situation, the bank should have declined your loan request. under every circumstance that i'm aware of, a decline of your loan request would prevent you from following through on the purchase, and you ought to have been released therefrom. the seller is not obligated to sell to you at the lower amount, necessarily.
what does your contract state? do you have a realtor? a lawyer? has the lender declined your loan?
what does your contract state? do you have a realtor? a lawyer? has the lender declined your loan?
Provide them with a copy of the plat of survey, the deed, the title policy, any sketch of the property or improvements you have, any knowledge of sales, listings or pendings in the area, a list of anything else you feel is important.
Stay out of the Appraisers way as much as you can, the more you talk to them, the less they focus on what they are there for. If they are only there 20 minutes, you should probably fire them unless you have ridculously simple house to do, like 2 bedrooms on a slab and they've been there before. A normal Appraisal Appointment typically takes 45 minutes to an hour. Larger homes more. If it takes less than one half hour be suspicious, you probably have a cheat on your hands that does not want to do the Appraisal the right way.
Stay out of the Appraisers way as much as you can, the more you talk to them, the less they focus on what they are there for. If they are only there 20 minutes, you should probably fire them unless you have ridculously simple house to do, like 2 bedrooms on a slab and they've been there before. A normal Appraisal Appointment typically takes 45 minutes to an hour. Larger homes more. If it takes less than one half hour be suspicious, you probably have a cheat on your hands that does not want to do the Appraisal the right way.
Certificate of appraisal is a formal evaluation of a certain date, which supports the analysis of information. Certification and assessment can be made only in the state certified evaluator.
There are different types of value opinions, "market value," "liquidation value," "anticipated sales price," "insurable value," "auction value" and "assessed value" are examples.
The choice of comparables may depend on the definition of value utilized. What may be the best comp for a liquidation value, may be poor to use for market value, or in some cases could be the same. The data available provides much of the answer. Two Appraisals done on the same day, with the same definition of value, generally should be about 5% variance. Although, that being said, the more custom, the more atypical, the higher that variance may be.
Well said! Don... :-)
I am wondering if it is fair to consider a home that sold recently that is basically the same as mine except the fact of it being a repo and trashed, meaning shower/ bath insert removed, heating stoves removed along with pipe leaving the roof and interior exposed for damage over the winter let alone the broken pipes. In trying to refinance this property was considered for a match in my appraisal. Brought my value down by 25-30k. your thoughts?
Welcome Randy,
Weren't the other homes considered while the property was appraised?
Thanks
Weren't the other homes considered while the property was appraised?
Thanks
The American Guild of Appraisers (AGA) retained a law recently that dramatically cut the fees that appraisers are paid to perform appraisals, and threaten the viability of professional appraisal practice and the reliability of appraisals used in real estate transactions.
source WASHINGTON, Nov. 7, 2011 /PRNewswire-USNewswire
i think it will discard malpractice on the part of appraiser in a good way.what do you think?
source WASHINGTON, Nov. 7, 2011 /PRNewswire-USNewswire
i think it will discard malpractice on the part of appraiser in a good way.what do you think?
Does the appraised value need to equal the sales price or the mortgage amount for the loan to be approved?
Does the appraised value need to equal the sales price or the mortgage amount in order to satisfy the lender?
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