How to Prepare for an Appraisal/What to Expect

For homeowners, a real estate appraisal is the linchpin to buying or selling their home. It allows the property transactions to occur among the buyer, seller, real estate agent and lender.

One's home purchase is the most significant transaction some of us may ever consider. The purchase of real property is a detailed transaction that requires multiple parties to make it all happen.

It's likely you are familiar with the parties having a role in the transaction. The most known entity in the exchange is the real estate agent. Then, the lender provides the money required to fund the transaction. The title company sees to it that all aspects of the exchange are completed and that a clear title transfers to the buyer from the seller.

So what party makes sure the real estate is consistent with the amount being paid? In comes the appraiser. We provide an unbiased estimate of what a buyer could expect to pay or a seller receive for a property, where both buyer and seller are informed parties.

Before an Appraiser arrives, there are a few things you should know. By law, an appraiser must be state licensed to perform appraisals prepared for federally related transactions.

Determine Appraisal Usage & Requirements

To begin our work, we must understand exactly what our client intends on using their appraisal report for. While the appraisal process is the same, certain situations require the appraiser to look at different data sets or consider different information that may be pertinent to a specific use. Certain forms may also be required to present certain information that is not found in standard appraisal forms. An example of this would be the analysis of rental comparables for an investment property.

When it comes to banks and lenders, they each have very stringent reporting requirements. Correct forms must be used and reports must be delivered with all forms in a very specific order. Your lender will usually let us know exactly what forms and in what format they need the final report delivered.

Setting Up Your Appointment

Once we have accepted your appraisal assignment and determined the requirements to complete and deliver the report, you will schedule a site visit with your appraiser. We try to accommodate all schedules as best as we can, as well as try to schedule you as soon as possible.

The Site Visit

For the site visit and appraiser will physically “walk” through your home, typically starting from the exterior and then moving through the interior. We will measure the home to determine an accurate gross living area or gross building area. The appraiser will take photos of the exterior, all interior rooms and systems. It is not a requirement that you clean prior to our arrival, though a clean home does show nicer in the photos. 

To facilitate the appraisal process, it's beneficial to have these documents ready for the appraiser:

• A plot plan or survey of the house and land (if readily available)
• Information on the latest purchase of the property in the last three years
• Written property agreements, such as a maintenance agreement for a shared driveway
• List of personal property to be sold with the home
• Title policy that describes encroachments or easements
• Most recent real estate tax bill and or legal description of the property
• Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells
• Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available)
• A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
• Information on "Homeowners Associations" or condominium covenants and fees.
• A list of "Proposed" improvements if the property is to be appraised "As Complete".

Once your appraiser has arrived, you do not need to accompany him or her along on the entire site inspection, but you should be available to answer questions about your property and be willing to point out any home improvements.

Here are some other suggestions:

• Accessibility: Make sure that all areas of the home are accessible, especially to the attic and crawl space
• Housekeeping: Appraisers see hundreds of homes a year and will look past most clutter, but they're human beings too! A good impression can translate into a higher home value
• Maintenance: Repair minor things like leaky faucets, missing door handles and trim

FHA/USDA Inspection Items: If your borrower is applying for an FHA/USDA loan, be sure to ask your appraiser if there are specific things that should be done before they come. Some items they may recommend might be: Install smoke detectors on all levels; install handrails on all stairways; remove peeling paint and repaint the effected area; provide inspection access to the attic and crawl space.

The most time-consuming portion of the appraisal is the behind the scenes work where the appraiser is reviewing recent sales of comparable properties of similar size, quality, condition and appeal. The appraiser spends several hours doing research and analyzing the market during this time. The report will include a minimum of three closed sales and may include an active or pending listings to provide additional support. The appraisal report will have a street map showing the location of the appraised property and the comparable sales. The report will also have a sketch of the property showing the layout and room configuration as well as the above grade square footage of the property. The sketch in the report will provide the measurements and size of the property. The report will also include photographs of the front, rear and street scene. The report will include front exterior photos and market sales data for each comparable property. The appraisal report will have the appraiser’s final opinion of the market value.The appraiser will send the appraisal report to the intended user normally by email in the form of a PDF. The report is typically delivered 2-4 business days after the inspection was completed, depending on the complexity of the assignment. We can accommodate rush requests. We suggest taking time to review the report and note any questions you may have. Please feel free to contact us anytime to discuss the report.