A home appraisal may be conducted at the behest of a homeowner who wishes to sell, a prospective buyer, or their lender. The purpose of an appraisal is to determine the market value of the house put up for sale. Unfortunately, many homeowners are not really aware of the process and what is involved. Here are four things you as a homeowner need to know about a home appraisal:
- You need to have your paperwork in order: Collect whatever documents and information there is about the house, and keep it ready – or send it across to the appraiser’s office. This can include major improvements made to the house, HVAC systems, major appliances, condition and age of the flooring and roof, and so on.
- The appraiser may not be able to tell you how much value is added by certain improvement features: It’s not possible for an appraiser to ascertain the additional value added to your home by saying – new door handles. All features of the home are considered and become part of the final estimated value of the house. To get an idea of the prevailing market rates, appraisers consider the sales value of at least three closed sales (sometimes more) in the area in the recent past, to arrive at a final estimate. If the home has great features and has received upgrades, the appraiser has a basis for reconciling a value closer to the upper end of the value range. In some rare cases, it may become possible to identify the specific value added by some features, but it will differ depending on the neighborhood, the market situation, and how popular that feature is. Again, if the condition of the house is not good, then adding upscale features may not really help as much as increasing value.
- The Appraiser won’t be able to tell you the value of your house immediately: When they come to inspect, they only collect the physical data – and as such are not able to give you a definitive figure. Once they get back to their office, appraisers have to research and analyze recent sales, trends of housing prices and so on, before they can provide a credible value estimate.
- There is no point in listing puffery: Put yourself in the buyer’s shoes and take a hard look at your home: what does it really offer? Including the basement area in your total square footage and then not disclosing that your roof is leaking, won’t cut ice; ANSI standards exclude rooms that are below grade from the gross living area and they are instead valued separately as a basement. Another thing is, you should never try to fudge numbers – like using a higher gross living area. Keep in mind that the appraiser will measure & calculate the gross living area and check on all the other details.
Keep these points in mind when your home is due for an appraisal. Additionally, you could do your research about the appraiser, or a generic search to find out what the appraiser will look for, and be prepared for it.
Looking for a reputable home appraisal service in Arkansas? At Nabholz Appraisals, we have over 25 years of experience serving a wide range of clients. Just call us on 501-327-6103, and let’s talk about how we can help you!