When we go out to a home to do an inspection, there are 2 main things we need to do: measure the GLA (gross living area) and take photographs of every room. Here are some reasons why we measure:1. We are required to measure by the lender.It is a requirement that any appraisal for a federal loan include a sketch of the subject property with labelled rooms. 2. Double check that GLA and county records match.This is usually not a problem with homes built within the last 10 years, but if there is a large discrepancy between the appraiser's measurement and county records, it can be a flag for additions (unpermitted or sometimes permitted additions that have not been added to county records).3. Does the floor plan flow?By measuring we are able to determine things we may otherwise miss. For example, when measuring a home that has an addition, we determined that the master bedroom was only accessible by walking through another bedroom. Doing a sketch and labeling the floor plans, helps us notice these things.
The appraiser won't know what your home is worth the second he walks in the door...What can you do to help the appraiser? Here are 4 things you can do:
1. Prep your space - declutter, dust, and mop beforehand to show your home in its best light. Also, inform all occupants that an appraiser is coming so everyone is up and out of bed! Appraisers don't judge cleanliness but a neat, organized home might help you.
2. Get your paperwork in order - gather all the information you have about the house and have it ready for the appraiser. Have a list of major improvements as well as detailed info about the age and condition of the roof, HVAC systems, and major appliances. This will be very helpful!
3. Don't put too much stock in home improvements - We're sure your brand-new kitchen is stunning, but don't be surprised if it doesn't proportionally raise your home's market value. If you spent $50,000, you're likely to see only a fraction of that returned in value.
4. Be honest - Before listing, make sure you and your realtor take a realistic look at what your home actually offers. It might be tempting to pad some square footage here and there. However, your appraiser won't be fooled, so it's best to always be truthful.
Here Are Just a Few Examples:
Estate PlanningPlanning for the future of an estate or collection is important. An appraisal can provide a valuable tool so that owners can plan in advance for tax, distribution or donation. RefinancingMost home buyers know that they need to get a home appraisal when they apply for a loan to purchase a property. However, an appraisal will also be required when a home owner wants to refinance their loan at a lower mortgage rate. Banks will order another appraisal to ensure what the value of the property is.PrelistingSome homeowners order a home appraisal prior to putting their houses on the market to determine the best listing price. This is a great idea regardless of whether the homeowner is or isn't working with a real estate agent to sell his/her property.DivorceMost state courts require a recent appraisal to determine a home's fair market value. In a contested divorce, spouses often want their own separate appraisals therefore two appraisals will be done. If the two appraisers reach different values, a judge will look over both appraisals to make his/her final decision.
A home appraisal consists of these three components:
1. A Physical Examination of the Property- The physical inspection at the house may take an appraiser as little as 30 minutes to perform or could take as long as two to three hours. This depends on the size of the house, known as Gross Living Area (GLA) and also the design of the home. An artsy Contemporary style home takes longer to measure than a standard rectangular Colonial home. Physical visits are usually brief when a home is in average to very good condition. However the inspection can take a bit longer if the property is in fair or even poor condition as there are more things the appraiser must observe and notate.
2. Selecting Comparables - Next, finding the most recent/similar sales that are located approximately within a mile of the property, and that have closed within the past 6 months, are what every appraiser is seeking!!! These properties are used to establish an accurate opinion of value. The appraiser will locate the most appropriate and comparable sales to be included in his appraisal report.
3. Completing The Appraisal Report - After a thorough physical examination of the property and locating the best comparable sales available, the appraiser will start entering all of this data into a standard appraisal report form. Once all of the data is entered, the appraiser evaluates all of this information so he can arrive at his final estimate of market value. Fortunately, almost all residential properties require only short form reports, usually 10 pages or less. Appraisers often can complete a report in about 5 hours. Depending on the appraiser's workload and on the complexity of the property, an appraisal report should be completed and delivered to the lender in about seven to ten days
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