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1. How Does the Appraisal Process Work?

There is no denying it; the birds are chirping, the flowers are in bloom and the real estate season is in full swing! You may be ready to get out there and some shop or finally ready to add your property to the market. If you are like any other buyer or seller, you are probably overwhelmed with where to begin and trying to decipher all of the real estate jargon may be jumbling your mind. You likely know that the appraisal process is one of the most important steps in your buying or selling journey and you want to know, what even is an appraisal and how does this darn appraisal process even work?

What is an appraisal and how is it used? "A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate. The appraisal can include recent sales information for similar properties, the current condition of the property, and the location of the property, i.e., insight as to how the neighborhood impacts the property’s value."

Who does an appraisal and how do I know that they will do a good job? Appraisers are highly trained and licensed/certified professionals. The job of the appraiser is to fairly, objectively and without bias determine the fair market value of your home in the state it is located in. While all appraisers are simply human and therefore without fault the value of your home is determined by serious appraiser training, on-the-job experience, a number of tests and continuing education. Appraisers are also required to corroborate any of their findings that could affect a home's value. Appraisers (and the companies they work for) work hard to remain impartial and keep any personal judgements out of their work as there are severe consequences to issuing deliberately misleading or biased reports.

What are the appraisers really looking for? The main thing that appraisers are really keeping their eyes peeled for is anything that is permanently attached to your home and your home's physical characteristics. These characteristics include square footage, location, view, number of beds and baths, etc. They are looking at your decor, paint, furniture, etc.

How does the actual process work? There are three main parts to an appraisal; the inspection, the comparables and the the final appraisal report. During the inspection the appraiser will come to the home to evaluate its size, function, quality and condition. To research and collect the "comps" the appraisers looks at the sales of similar homes to yours in your area to determine the fair market value of your home. In the final appraisal report the appraiser compiles all of the data and issues the final appraisal report.

How to boost your homes appraisal value.

1. Put your homes best face forward. Pay attention to and repair things like, cracks in the walls, stains in carpets, broken windows, pests and persistent odors.

2. Appraisers often value houses in $500 increments, so if there’s a repair over $500 that can or should be made, do it. Fix leaky faucets, broken windows and cracked ceilings.

3. Curb appeal makes a big difference. Take the time to mow, prune and do any other fixes or improvements to make your home look like a nice and welcoming place to visit.

4. Provide your appraiser with a list of recent improvements. Take note of what the improvement was, when it was made and about how much it cost you. Print this list and provide it to your appraiser.

5. Take pride in your neighborhood. If there are particular amenities to where you live or if recent improvements have been made to your neighborhood include these on the list you print out for the appraiser.

6. Update your home's age. The newer your home appears to be- despite its actual age-the better. Bring your permanent fixtures (carpet, tile, fixtures and windows) into the 21st Century.

What if I am not happy with my appraisal? If you have read the appraisal report and have reviewed the supporting documents and are not satisfied with your appraisal or feel that it is not fair you can decide to challenge the appraisal. However, most lenders review appraisal through a strict system of checks and balances that will compare your appraisal report to other reports in the area. This internal system review is there to catch any discrepancies but any information you can provide to your lender during your challenge of your appraisal can help your case.

There can be a lot to appraisals. Don't hesistate to reach out to me to walk you through the process. I am here to support you each step along the way.


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