Home Appraisal - How To Make The Best Of It.
Connie Sanders
If you plan on selling your home you should get an appraisal before you decide on the selling price. I remember a retired couple that set their selling price based on the real estate agent's analysis. Their home sold in three days! When the appraisal came in it was $20,000 over the selling price. That was a terrible shame but it can be just as bad if you price it too high and it just sits on the market. An upfront appraisal will protect your equity and be well worth the cost.
You should understand the appraisal process so you can increase the value of your home. These are the major steps in the sequence followed by appraisers:
1. He will research the property as to size, number of bedrooms and bathrooms, the year it was built, the lot size and square footage.
2. Research data of recent sales in the neighborhood. The appraiser needs to locate at least 3 similar-sized homes that have sold with in the last six months. The homes also need to be within one mile of the subject property. These other homes are called the "Comparable Properties".
3. The appraiser will then perform field inspections. The inspections consist of two parts: a complete inspection of the subject property, and the exterior inspection of the comparable properties.
The property inspection consists of taking photos of the street scene, front of the home and rear of the home. The appraiser will make an interior inspection for condition, noting any items that would detract from or add to the value of your home. He also draws a floor plan of the home while doing the inspection.
The comparable property's inspection is limited to the exterior. Features that cannot be seen from the street, the appraiser uses: reports from Multiple Listing Services (MLS), California Market Data Cooperative (CMDC), county public records, and appraisal files to help determine the condition.
4. After the field inspection has been completed, the appraiser must determine which comparable properties most resemble the subject. Then he/she makes slight adjustments in value for any differences. After making the required adjustments, the appraiser must go through a reconciliation process with the three comparable properties to determine a final estimated value of the subject property. This method is called the "Direct Sales Comparison Approach to Value", and it accounts for nearly all of the considerations in determining value of a single-family property.
Please remember the appraiser will be taking pictures of the street and the front and back of the home. The street scene projects some kind of idea as to the neighborhood in which the home is located. The photo of the front of the home gives the lender an idea of its condition and its curb appeal. Lastly, the photo of the back of the home and part of the rear yard is another indicator to the lender of the home's care and maintenance.
In most cases, what you see in the condition of the exterior of a home will be repeated almost exactly in the interior. One of the most important things you can do to increase the value or perceived value is to improve the curb appeal of your home, and clean up the back yard.
An appraiser will call in advance to set up an appointment to inspect your home. At that time offer to supply any information about the home size, number of bedrooms, bathrooms, pool, enclosed patio, etc. The more that is known about the property prior to inspection, the better the appraiser can focus on researching the most similar comparable. Doing your homework will maximize your chances of having a good appraisal.
While your home is being inspected don't follow the appraiser from room to room causing distraction. Instead, allow the inspection to go smoothly. In case the appraiser has any questions, be close by to answer them. The time to mention the things you think are important is either before or just after the inspection.
The best thing you can do to increase the perceived value of your home is to get it ready before the appraisal. Clean it, put fresh paint where needed, and clear the clutter inside and out. You should also make any minor repairs needed and be sure to manicure the front and back yards!
Understanding underwriting guidelines is the key to getting a good home loan. That is why Connie Sanders created http://www.fha-guidelines.com/ FHA Guidelines. This site and home loanunderwriters.com will teach the homebuyer everything they need to fully understand their options and how to qualify. Take a look.
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