Nov 25, 2009
What exactly is a Home Appraisal?
It is important to distinguish the difference between a home inspection and a home appraisal. There may be companies or individuals that offer both of these services however there are differences. Both a home appraisal and a home inspection will likely look at the general condition of a home but a home appraisal is conducted mainly to determine the value of a home given current market conditions and the location of the property.
A home appraisal may be requested either by the owner of a home who wishes to know the value of their property or by a lending institution that is considering offering a home loan or the refinancing of a mortgage. If it is a lending institution that has asked for a home appraisal they may have an individual or company that they generally work with but there should be no incentive or bias on the part of the person doing the home appraisal.
If you are having a home appraisal done and you have concerns about a potential interest or bias you can speak to the person doing the home appraisal, to the lending institution or to the regulatory body where you live. This can be done either before the home appraisal is conducted or if you are not pleased with the results.
It is a common misconception that most of what someone doing a home appraisal takes into account is related to the condition of the home. While this is a factor, a large part of the properties appraisal value has to do with the existing market conditions. It can also be affected by the value of other homes in the area and generally a home appraisal will include examples of other properties that are similar to the one being appraised.
A home appraisal will generally also include any factors that may be an issue to a potential buyer of the property. If the property is difficult to access or has adjacent properties that could cause a problem due to noise or other pollutants this can reduce the value of a home.
Home appraisal generally includes only the part of a real property that is considered to be permanent. For instance if you have an in-ground pool this will likely be included in the value of your home. If your pool is above-ground this would not be considered permanent and would not be included in the value of the home. The same is true for structures on the property that are not considered permanent.
While it does not directly affect the value of a property, the home appraisal will often include information such as how long it would likely take to sell a property. This may be part of the consideration of lending institution when it comes to financing home.
The results of a home appraisal are kept confidential including the value and the purpose of the home appraisal. If you have ordered the home appraisal yourself then the firm or individual responsible for conducting it should share the results only with you. This will be true if it has been paid for by lending institution and they may not necessarily provide you the information that they have received.
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Help answer the question about home appraisal
How long does it take to complete a Home Equity Appraisal? ?
how long does it take from start to finish for a home appraisal to be completed? From the moment they walk through my door (its a walk thru appraisal) to the moment they send the completed report to my lending institution?
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From my knowledge a HELOC does not require an appraisal. They are done for refinancing and purchasing . The banks use automated appraisal software for HELOC. Appraisals are usually good for up to 6 months.
1. walk through in and out
2. yes
3. 95% of the value of the home is based on the sq. ft. and the neighborhood (they will compare your home to 3 other homes of the same size in your neighborhood)
4. appx. 30 min
You just need to look at how much the home is worth and what the asking price is on the house. If the appraisal is less then what the house is worth they wont sell the house. But since the appraisal came back 5K over your good to go for now.
It depends on the contract and I AM NOT A LAWYER.
However, in the state of Florida, typically an appraisal below contract price triggers the Finance contingency in a contract which gives the buyer and seller the opportunity to come to a new agreement on price, the buyer may also come up with additional cash so the lender will approve the loan or for the buyer to walk away from the deal penalty free.
Yes, that is suspicious, especially since they were hired by the mortgage broker.
Did your Realtor pull comps for you to determine the market value of this home?
Maybe just a coincidence, but this gives me deja vu to 3 years ago when appraisers were essentially rubber stamping the offer and loan approval numbers.
A second review is where another appraiser (usually from the bank) reviews the appraisal and the comparisons to make sure that the value from the first appraiser is accurate and not showing an inflated value. I wouldn't worry about it, this has become a common practice with virtually all lenders due to the recent changes in the mortgage industry. If you are getting an FHA loan, there might be a possibility that the appraiser wasn't on the FHA approved list so the bank has to have an FHA approved appraiser verify it.
Hope this helps.
If the appraisal matches your offer you have no grounds, you and the appraiser are in agreement.
It is pretty common for this to happen, appraisers often do nto go inside and have no idea what upgrades exist. 15k is not very much, you are acting as if a lot was missed when it is a minor amount.
According to USPAP (Unifrom Standards of Professional Appraisal Practices) the standard to which all licensed/certified appraisers are required to abide states that for a purchase transaction the appraiser is required to evaluate the terms of the transaction – this involves reviewing the sales contract.
This standard has long been in place so I have no idea where your appraiser came up with the 1 Jan 07 date, sounds like she is mixed up with something else.
In cases of refinances I believe an appraiser should not be provided with the 'owners opinion of value' because you are correct that there are some appraiser that are just number chasers to make sure they keep getting business from the loan officer/brooker.
With a purchase you also need to remember that your purchase price is now affecting the market. If other sales in the neighborhood are in close range to your purchase price this may cause the appraiser to value your home closer to the purchase price.
If you want an honest opinion of value you need to find a reputable appraiser and have them appraise your home without providing them with an estimated value. You could also hire an appraiser to do a 'field review' on the appraisal already completed this is usually a little cheaper. A 'field review' would be the equivilant of antother appraiser grading the quality of the original appraisers work, and let you know if the agree with the original value.
I agree with "B". You bought near the height of the market and now we are near the lowest. There really isn't anything to dispute. Most lenders use appraisal firms who will give the value needed to make the sale. However, they are not going to appraise your house for 123K above the current value. The appraiser's job is to determine the value of your house if it was sold today and has no relationship to how much you paid for your house. The lender isn't obligated to "shop" your appraisal. Even if they did get other appraisals, you won't find one who will increase the value to what it was worth 3 years ago.