Oct 25, 2009
What to Expect at Home Appraisals
Whether you are selling your home or refinancing, you’ll probably getting a call from an appraiser. Their job is to determine the fair market value of your home based on guidelines set out by the Federal National Mortgage Association. This is not the same as a competitive market analysis that many real estate brokers perform, sometimes referred to as “comps”. The professional appraiser does an in depth analysis of you home’s condition, additional features as compared to other similar homes, and location.
They start by looking at you neighborhood and find comparable homes that may have sold recently, characteristics of lifestyles, income level in the area, average age, and surrounding home values. So if you home has 4 bedrooms, 3 bathrooms, and a 2 car garage on a half acre of land, they will try to find a similar home in a nearby neighborhood. Sometimes they will extend their search and compare homes within the same school district when it is a known factor that affects the value of a home.
Once they find comparable properties, they will make some adjustments. Sometimes they will add value to your home based on the landscaping, external features such as a fenced back yard, or maybe there is view of the ocean. Numerous items may be added or subtracted from your home’s value. Living space, numbers of rooms, sales in the last 120 days, usable land, and many other factors are considered. Rest assured it is not an entirely subjective process, but rather methodical and universal.
They don’t consider your choice of wallpaper and curtains. They don’t care if there are 200 toys laying in the family room or that you didn’t make you bed. Of course it doesn’t hurt to tidy up a bit, but it’s not really a factor in determining the appraised value of your home. They are there to measure boundaries, going to each level in your home and looking in all the rooms, and taking more measurements. A few pictures are taken only for the appraiser’s folder which will go in a file.
Normally, if you are buying a home or refinancing, you can let the lender know if you prefer a particular appraiser or company. You can ask any real estate broker if they can recommend someone to you as well. A qualified appraiser is licensed by the state and will cost from $150 to $500 or more depending on the size of the home.
If you are selling your home, the buyer normally pays for this. However, it wouldn’t be a bad idea to get an inexpensive online appraisal. You can find one of the better instant online appraisal companies at Online Home Appraisals.
Watch the video related to home appraisal
Explore the varied career options available to valuation professionals with the Appraisal Institute of Canada.
Help answer the question about home appraisal
How long, from the time ordered, should an average bank home appraisal take?
Hi there, my Husband and I are anxiously awaiting the results of our bank’s home appraisal for our new home. Everything else is ready to go, we’re just waiting on the appraisal so we can get papers ready to sign and move into our house. The mortgage company told us they put the order in for an appraisal over a week ago – how many days does it take before the appraiser actually gets to our house and finishes up his report? We’re excited and ready to move forward! Lol* Thanks for any help anyone can offer. 
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Robert Rogers is a writer in the Washington DC area. For more free tips and resources, visit his website
Home Appraisals Online
Appraisers are tea leave readers. A house has no practical value, unless somebody wants to pay for it.
Until 1 year ago, appraisers just set in the appraised amount as the sales price or asking price, whatever was wanted.
All that comp stuff they do is useless unscientific magic.
They take the comps from the MLS and Realist , which are so full of BS, it's funny.
Today, they have directions from the lenders to go as low as possible with their estimates. But in a reality, your house has no value anyway, since there are no buyers.
Typically the appraiser will call to schedule an appointment. We inspection interior, take pictures, draw some pictures and finish with inspecting the exterior and measuring foundation. No need to prepare anything, but condition is important both inside and out.
FHA loans, as well as conventional loans take approximately 30-45 days, depending on how fast the parties involved can meet the conditions of the lender. Most conditions have to do with the borrower providing all documentation requested in a timely manner.
The fastest time for a loan to be approved is about 10 days, and there is no "longest" time. Again, if the conditions are not met promptly, the loan can drag for months and months.
Under an FHA loan, the down payment does not fluctuate, it is always 3.5% unless you are using an FHA loan in conjunction with another program, such as a down payment assistance program.
Closing costs are associated with the purchase price and as a result, will fluctuate. The more expensive the home, the higher the closing costs. There are many fees associated with a closing and most of them will fluctuate. Some of the fees that remain constant regardless of the purchase price are the Notary Doc Signing Fee, the messenger fee, wiring fee, recording fee, and (sometimes) the escrow fee. There are escrow companies that charge a flat fee, and there are others that charge based on the purchase price.
There is nothing to lock in at closing! The only thing that can be locked is the terms of your loan, but this is not done at the closing; it is done prior to closing, when your loan officer feels that rate is at its lowest cost, and that it will move up. The other thing that can be locked is your credit score, but this is a bit more complicated to explain.
You need to understand that the 3.5% down payment, is completely separate from closing costs. The down payment is money that is going to the seller, and this money will reduce the amount of money that you will have to borrow. This 3.5% can also be looked at as equity. The closing costs is money that you have to pay for the different services involved in completing the transaction. There are many services involved. Some of them include 1) escrow, a third party whose function is to bring together all of the services involved and is the heart of actually completing a transaction. Escrow agents follow the instructions given to them by the buyer and the seller. 2) title, a company that will issue a title insurance policy to make sure that you are protected in case any clouts appear on title 3) loan officer, the person responsible for helping you obtain the loan 4) Notary, individual that will make your signatures legal. There are other services that your have to pay for at closing.
Hope it was helpful!
You can not force the appraiser to value the improvements, they are NEVER part of the appraisal. The only thing you can do is try to force a change in the listed condition. If it went from from "poor" to "good" you appraise higher.
You can not force the bank to use any other appraiser then the one they have hired. It is their money.
As for your rhetorical question, it is because they borrowed MONEY. Cash money. Refusing to repay it does not make it a gift. They still owe a huge chunk after a foreclosure.
If you are unhappy with this bank you can try another, but your appraisal should not vary by much. They all use the same criteria.
Shop around for local appraisers in your area using the web.
I generally use http://www.switchboard.com
Hope this helps…
It will depend on how fast the bank processes the paperwork, how long the title company takes to get their work done, and when they can schedule the closing. If you let them know you are hoping for a fast closing, they may be able to accommodate. We sold one and had the closing done within 3 weeks of the purchase/sale agreement. The bank assigned a classmate as the lawyer, and he whizzed all the paperwork along for us when he found out we were leaving the state and would like to hurry.
Electric is not usually a factor in the appraisal unless it is an upgrade. If you have had all of the electric redone and you give the appraiser a price they will include that in the overall price tag. They are not going to deduct anything though. Generally in the appraisal a person measures the length of all the rooms, the garage, notes of any additions or remodeling,new roof or siding, new stove or other appliances such as hotwater heater or airconditioning, finished basement and measurement of property. Homes of the surrounding properties are incorporated. The main thing that determines how much your house is worth is the square footage, number of bedrooms and bathrooms and what the surrounding homes have sold for. IN the case of refinancing, they just want to make sure that your house can be sold for what the mortgage is if you were to lapse on payments. I wouldn't worry about the electric. Just tell them you have an electrician coming. (You really should anyway to make sure there isn't any elecrtical fire hazards going on).
Well both real estate appraisals and tax appraisals are based on the location of the home.
Usually (again based on state and local tax laws) a tax appraisal is lower than a real estate appraisal. (Some locations they are the same) It usually is based on some type of approved formula and has modifiers based on property usage.
Real estate appraisals are usually market based, where an appraiser will identify homes in your area that are close in style and size to yours that have recently sold. They will use these to come up with an estimated market value for your home. They will take into consideration all the aspects of a home, where a tax appraisal is done more around sq footage and acreage.
As for tax appraisal problems, well it doesnt affect market value of home, but it does effect your pocket book. property taxes are based off these appraisals. You will have a small window to challenge a new tax appraisal. these appraisals are not always fair and accurate. You can go to your local county/city clerks office to get information on tax appraisal process, percentage value of appraisal to market value, property tax rate and process to challenge tax appraisal if you feel it is not correct based on market value of home.
Good luck
These days the seller does not pay for any of these closing fees outright. You have to negotiate them, which of course lessens your bargaining power for a reduction of the price. Ask for a good faith estimate from your lender and it should give you an idea of what fees there will be for closing. Even if they have it broken up into seller/buyer fees, these things are not guaranteed. Expect to pay everything listed unless you have explicitly negotiated them with the seller already.
In general, the big ones are home inspection, appraisal, processing fees, discount points (unless you finance them), originating fees, any upfront fees for escrow (like pre-paid insurance, taxes, mortgage insurance premiums). There should be other random fees like courier fees and the like, but in comparison to the larger ones like processing fees and appraisal fees, they shouldn't be too large.
Keep in mind good faith estimates are not exact. Many of the services the lender charges you for are to be paid to third-parties. Therefore, whatever they quote you is simply an estimate, they have no control over how much it will ultimately cost.