A Guide to Home Appraisals A Guide to Home Appraisals

This guide to home appraisals should help you as you navigate through the process of buying or selling your home in today’s real estate market. That process can be a stressful one, due in no small part to the uncertainty involved in home appraisals. Houses have market values, which are based on a variety of standardized factors, but because they are sold so infrequently, relative to other commodities, a house must have an appraisal before it can be sold on any given occasion.

Many people, when first they set out to sell their homes, aren’t aware of how exactly a home appraisal works; they don’t know who to go, how to get one, what is involved in the process of appraising their home, or how the value is derived. They don’t know how to properly appeal the results of an unfavorable appraisal.

Some homeowners are not even aware that an appraisal is necessary or that it is genuinely advisable, regardless: a legally upstanding declaration of your house’s value, after all, can certainly work in your favor. In the event that you are selling your house, the form of appraisal you want is a “market value appraisal,” which will provide you with the fairest result. Just another reason why a guide to home appraisals is so important!

Whether you are buying or selling a home, an appraisal is a critical step in determining the value of a property. A licensed home appraiser conducts a real estate appraisal by inspecting the home and researching the sale price of comparable homes. Appraisers use the cost approach, the sales comparison approach, and the income approach to estimate the value of a home.

Mortgage lenders typically require all home buyers to request an appraisal. Appraisals help lenders to ensure that the sale price matches the amount the seller is asking for. If the appraised value is less than the asking price, a real estate agent can help buyers renegotiate the price with sellers. Homeowners can also request an appraisal when refinancing their home mortgage.

Appraisers will consider the condition of the home, its age, location, size exterior and interior, design and structure, signs of damage and infestation, and home improvements.

In this article, you will get to know the basics of home appraisals. You’ll also find a helpful FAQ section at the end of this guide.

Why You Need A Home Appraisal

What is an appraisal?

A home appraisal is an estimate of a home’s fair market value. It is determined by a licensed appraiser when a mortgage is involved in buying, selling, or refinancing a home. Home appraisals serve two main functions:

  1. Purchase-and-sale transactions: Buyers determine if the home’s contract price is appropriate, considering its location, condition, and features:
  2. Refinancing transaction: Lenders make sure that the borrower doesn’t ask for more money than the home is worth. This is because the home in question serves as collateral for the mortgage. In the worst-case scenario, borrower defaults on their mortgage and are forced into foreclosure so the bank can recoup the money it lent.

Home appraisal report

In the appraisal report, licensed appraisers will find an analysis on conclusions about the property’s value. The appraiser creates a home appraisal report based on:

  • An in-person visual inspection of the interior and exterior
  • The neighborhood and location
  • Comparison of recent sale prices of similar properties
  • Home features (square footage, floor plan, amenities)
  • Current market trends
  • The general condition of the home

The home appraisal report will also include the information and data:

  • Information on the client and intended users
  • Purpose of the appraisal
  • Value determined by the appraiser and what the value signifies
  • The effective date of the appraiser’s opinion and conclusions
  • Street map of the appraised property and comparable sales
  • Calculations of property square footage
  • Relevant property attributes: physical, legal, economic attributes, property rights; non-real estate items included in the appraisal, including personal property, trade fixtures, and intangible items<
  • Exterior building sketch
  • Photo documentation of the property’s front, back, and street scene
  • Photo documentation of the exterior of comparable properties
  • Fair market value reports: market sales data, public tax records, and public land records
  • Information on known easements, reservations, restrictions, ordinances, special assessments, leases, and contracts
  • Division of interest (physical segment, partial holdings, fractional interest)

Home Appraisal Process

Since appraisals protect the lender’s interests, lenders are most likely to order the appraisal. Most appraisers charge several hundred dollars per transaction, and the borrower usually covers the cost.

After the home appraisal, a mortgage underwriter will review the loan file and ensure that all documents are complete. The underwriter will then assess the risk level of the loan and either approve or deny the loan based on the information provided.

Appraisal for Home Buyers

Home appraisals are a critical component of closing a sale. If the appraised home value is about equal to or above the contract price, the transaction proceeds without any issue.

However, if the appraisal is below the agreed contract price, the transaction may be delayed or derailed. Since lenders will not lend more than the home is worth, buyers can use this opportunity to negotiate a lower price with the seller.

While appraisals prevent buyers from overpaying for homes, sellers may argue that low appraisals are inaccurate. If they are unwilling to drop the contract price, buyers can request a second opinion from a different appraiser.

Appraisal for Home Sellers

If you’re selling your home and get a low appraisal, you may need to consider lowering the home sale price. No lender will want to be involved in an overpriced home transaction.

What does an appraiser do?

Professional real estate appraisers should be licensed and certified in the state they live. For my clients, they should acquire a Georgia appraisal license to conduct appraisals in Houston County GA.

Qualified appraisers should also be familiar with the local area and market regulations. According to federal regulations, real estate appraisers should be impartial and have no direct interest in the home transaction.

What does an appraiser look for during an appraisal?

How Home Appraisals Work

A home appraiser will thoroughly review your property taking time to delve into the following items in detail:

Upkeep and condition of the home

The appraiser will first look into the general details of your home and property. The most important thing that they will inspect is the habitability of the home. If the home is structurally unsound and unsafe to live in, you should expect a bad appraisal.

They will also look into maintenance and upkeep-related issues. Appraisers will note any signs of neglect, such as damaged doors, windows, walls, flooring, and ripped carpeting.

Neighborhood and location

Appraisers will factor in where the home is located. They will assess the property’s desirability in the market, considering low crime rate and proximity to schools, hospitals, and police stations. The report will also assess the home’s proximity to busy streets, owner-occupied/renter-occupied homes, and foreclosed properties.

Appraisers will compare your home to similarly-sized houses in your area

Home value is directly proportional to square footage and the number of bedrooms.

Age of the home

Age plays a big role in determining the appraised value of a home. Newly constructed houses are valued higher, but there are cases where older homes are priced higher. Old homes located near historic districts may fare better in appraisal reports.

Home’s exterior and interior

Appraisers will look into your home’s exterior, including signs of structural damage, roof quality, and the condition of the porch deck, siding, and garage. For the home’s interior, the appraiser will assess the number of bathrooms and bedrooms. Appraisers will also check if you have an attic, a basement, or a crawl space.

Appraisers will also look into your home’s foundation and assess the materials used for the floors, walls, and windows. There must be no problems with structural features and access to basic services (water and electricity).

Home design, improvements, and renovations

Homes with updated and renovated kitchens and bathrooms are more favorable to home appraisals. Homeowners considering renovations to increase home values should focus on projects like a new roof, new siding, a bigger garage, and hardwood flooring to increase the value of their home.

Having central air conditioning will also be beneficial for appraisals. Appraisals will also assess the type of fuel you use in your heating and cooling systems. Energy-efficient homes are also considered a big plus in increasing the value of homes.

Signs of water damage, or infestation

Even minor water damage can bring potentially toxic and dangerous side effects. Water damage can cause rotting, mold, and mildew to accumulate in your home.

Appraisers will watch out for plumbing issues, roof leaks, and stains on the walls, ceilings, or walls.

Signs of infestation (termites and rodents) indicate irreparable structural damage to a home that will negatively affect your home’s appraisal.

Safety features

For homeowners with government-backed loans, appraisers will look into the presence of required safety features such as smoke detectors and handrails on staircases.

Finding a professional appraiser

When you are looking for an appraiser, you need to make certain that they are licensed to perform real estate appraisals by the state in which you are selling your home…and don’t be afraid to ask for their credentials! This is a simple matter of professionalism, and it shouldn’t be taken personally. An appraiser who balks at presenting their credentials is sending up a big red flag (that being said, this really shouldn’t be an issue).

Other concerns, when looking for an appraiser, include whether or not your appraiser is experienced at working with consumers as opposed to real estate professionals only. This might not seem like a big deal, but a home’s market value appraisal is based upon different factors than that of commercial real estate (aesthetics matter a great deal more, for example) and an appraiser who is not used to looking at property from a consumer-oriented focus may undervalue your house.

You also want an appraiser who, ideally, is familiar with your neighborhood; if a number of houses have sold in your neighborhood recently, getting the appraiser who appraised one or more of those homes can significantly reduce what might otherwise be a bit of a headache.

Why do I need a real estate home appraisal?

As mentioned, home appraisals serve a function in the home sale process and refinancing transactions.

Here are some of the common reasons why you may need a real estate appraisal:

  • When you’re applying for a loan
  • To build homeowner’s equity and remove insurance.
  • To get lower property tax obligations.
  • To escape expensive property taxes.
  • If you need a negotiating edge when buying real estate.
  • When you need to split financial assets (divorce or settling an estate)
  • To find an appropriate listing price for your home

Homeowners have already formed an emotional attachment to their homes, making it difficult for them to see the property objectively. Bringing in an independent and unbiased third party will help buyers, sellers, and lenders to determine how much a home is really worth.

Appealing a Home Appraisal

It is important to understand that a home appraisal can be appealed and there are a variety of situations where this is appropriate. A simple clerical error on the part of an appraiser, for instance, can result in a house being severely undervalued. It isn’t necessarily even a matter of your opinion versus theirs: appraisers use standard forms, and errors such as ticking off the wrong number of rooms are not uncommon. This is good for neither the seller, nor the buyer and a prospective home buyer might find his or her chances at securing a mortgage killed if the market value established through the home appraisal undermines the agreed-upon purchase price for the house.

How to Appeal Your Home Appraisal

Fortunately, most lenders are open to appeals from homeowners in the event that an appraiser may have made a mistake, but you will need to present evidence to back up your case: this involves reading the appraiser’s report carefully.

The process of appealing a home appraisal is the same for buyer and seller: take the appraisal report to the lender or other institution with whom there is an issue, and explain any mistakes that were made, from your point of view. Make a special point of highlighting mistakes which are readily quantifiable, factually speaking: it is entirely possible, by way of an example, that an appraiser might have undermined the value inherent in the trees you have growing on your property, but it’s a far simpler affair to point out that they forgot to include your garage, your basement, one of your bathrooms, or your finished attic.

One part of the appraisal report will be a list of “comps” chosen by the appraiser. These are houses, in the same neighborhood as your home (or the home you wish to buy, depending upon your position), which have been sold within the last six months.

In the event that you find yourself appealing an appraiser’s report, you should take a look at the list of comps. How much did each house sell for? The sale values of these homes will have been used by your appraiser in determining the market value of your house. Does your house have any advantages over the homes listed as “comparable” in the appraisal report? Does it sit on more land, or have more bedrooms, more bathrooms, or a greater square footage?

With any luck, of course, you won’t have to worry about appealing your home appraisal. Most of the time, appraisals work out just fine, and the process of getting your house and property appraised is just another step in selling your home. Now that you know how to find a solid appraiser, and how to appeal if fortune forbid there is an issue of some kind, the overall procedure will hopefully be a little bit less stressful for you.

FAQ – Warner Robins Appraisals

How many long does the home appraisal process in Warner Robins, GA take?

The entire home appraisal process in Georgia takes approximately 7 to 10 days. However, the amount of time it takes will depend on the complexity of the appraisal case and the appraiser’s schedule. A licensed appraiser will visually inspect the home’s interior and exterior for about 30 to 45 minutes –– at most two hours. They will also measure the home’s square footage and evaluate the condition of its features, amenities, and fixtures.

They will then compare the home to similar sold homes in the neighborhood. After the initial inspection and sales comparison, the appraiser will write the appraisal report.

How much is a home appraisal in Warner Robins, GA?

Home appraisals range between $300 to $500. The final appraisal value will depend on the home’s size, location, and condition.

Most home appraisers are charged on an hourly basis or a flat rate. If your appraiser expects to receive a percentage of the home’s value, this may indicate unethical practice.

What’s the difference between a home appraisal and a home inspection?

Home appraisal and home inspection both involve inspecting a home’s condition. However, home inspection and an appraisal are two different processes:

  1. A home appraisal determines the value of a home. Meanwhile, a home inspection looks at the home’s condition and determines if it is habitable.
  2. Appraisal inspections usually take less than an hour, while home inspections can take several hours to check home damage and risks.
  3. The appraiser communicates the estimated value of the home to the mortgage lender, while the home inspector recommends necessary repairs to the buyer or the seller.

How do I prepare for a home appraisal in Warner Robins, GA?

While it’s difficult to change the outcome of an appraisal report, sellers can still prepare for the appraiser inspection with the hopes of getting a better appraisal report.

  • Sellers should prioritize repair jobs to get a favorable appraisal report. Focus on patching roofs, fixing faulty doors and windows, and replacing ripped carpeting.
  • Home sellers should focus on improving the home’s curb appeal. Spending on landscaping and your home’s exterior is a wise financial decision that will increase your home’s value.
  • Prepare a list of upgrades, renovations, and home improvements that you made on your home. Present this to your appraiser so they can factor it into the report.

How do I find home appraisers in Warner Robins, GA?

The easiest way to look for home appraisers near you is through the internet. However, it can be time-consuming and confusing to compare client reviews on social media accounts and websites. If you do not have the time to contact and compare qualified appraisers in Warner Robins, your real estate agent should connect you with a trusted appraiser.

Real estate agents will take the liberty of scheduling an appointment with the appraiser for your convenience.

How much is a bathroom in an appraisal?

Bathrooms generally account for 10% to 20% of a home’s value. In most cases, a bathroom will add $5,000 to the appraisal value of a home.

How much is a bedroom in an appraisal?

Bedrooms can add $10,000 to $25,000 or even more to a home’s appraisal value. This value will depend on the size of the bedroom, the home’s total value, and the location and amenities of the home.

Need help with home appraisals in Warner Robins, GA?

Home appraisals are a necessary component of real estate and refinancing transactions. It can be difficult to look for qualified and trustworthy appraisers in Warner Robins. Real estate agents can help you get in touch with qualified and experienced appraisers in Georgia.

Get in touch with a local real estate market expert like me, Anita Clark at (478) 960-8055, for real estate services tailored to your needs.

Final Home Appraisal Tips 

As previously mentioned, a home appraisal is, put most simply, an evaluation of the cash value of your house and property, based upon such diverse factors as your home’s size, its number of rooms, its condition, its location, the visual appeal of the building and the property as a whole, and your home’s amenities.

The appraisal value is affected by the current real estate market, and it must be based upon a legal concept known as “highest and best use,” which states simply that the appraised value of an item of real estate must be based upon how the property might best be used, not necessarily, on how it is being used at the time of sale (although the highest and best use of a house is typically as such).

It is important to note that, while there are standardized guidelines for appraisers to use, the appraisal is legally defined as an informed professional opinion comprised of a series of educated assumptions, and as such it is open to interpretation and appeal. One appraiser might focus upon improvements you’ve made to your house’s exterior since moving in, and with your property as a whole, while another might be more concerned with the interior of your home.

Certain factors will be based upon local concerns, which can’t be covered broadly; an example of this might be the appraisal of a house with private full bathrooms attached to each bedroom, and a half-bath for guests, as opposed to a house with one or two full baths in their own distinct areas, leaving room for larger bedrooms; which of these is considered more desirable will depend partly on where you live.

Again, a local real estate professional can help walk you through the process.

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A Guide to Home Appraisals

About Anita Clark Realtor

Anita Clark has written 617 posts on this blog.

Anita is a residential Real Estate Agent in Warner Robins Georgia, with Coldwell Banker Access Realty (478) 953-8595, aiding buyers and sellers with all their real estate questions on her Warner Robins blog.