There are many reasons why you need a real estate appraisal. Reduce property taxes, probate, estate planning, and divorce settlements are some. The most common one is to obtain a mortgage. Most lenders are required by federal and state laws and current banking regulations to obtain an appraisal for most loans secured by real estate. As of January 1, 1993, all appraisals made for mortgage loans from federally insured lenders and all other federally related transactions must be made by a licensed or certified appraiser.

An Appraisal is an objective supported opinion of the value of an adequately described piece of property, made by a person who has sufficient knowledge, training and experience to accurately estimate its value. In this detailed and time consuming task, appraisers use comparable sales together with information about the property being appraised, its neighborhood and community along with the local and national economy, to support the appraised value.

The most important thing an appraiser can do when previewing is to look at the property as if vacant: four walls, floors and roof. Décor and furnishings should not influence value.

If you are buying a house with the owner carrying the paper (loan), it is well worth the cost to hire an appraiser to make sure you don’t pay more than it is worth. For your protection many real estate agents will write in a purchase contract: "this contract is contingent upon the property appraising for the sales price."

The value of a house is based upon recent sales of the similar neighboring homes in the market as well as rentals and listing data. Ideally, appraisers want to use sales of properties of the same size, age, room count, and condition and with similar amenities and external influences. This rarely happens though, so adjustments have to be made, based on what people will pay extra for.

Examples: extra square footage, bedrooms, fireplace, upgrading, parking facilities, swimming pool, lot size, location and so on. To help get a better picture, this information is entered on a form, a value for differences is established and comparisons are made to the subject property. A minimum of three verified closed sales with photos are required to estimate value.

Houses Appraise for More When:

• Well maintained inside and out.
• Located in a good school district.
• Additions are done with proper building permits.
• Additions conform with and fit well into the existing home.
• Properties throughout the neighborhood are well maintained.
• Not over improved or the largest house on the block.
• Style of the house conforms with those in the neighborhood.
• Zoning changes are not expected or there is not a mixed use.

Remember: Location, location, location. You can change everything about your house except it’s location.

What Is Poor Location?

• Located on a feeder street.
• Under an airport flight path.
• In or near gang territory.
• Center of nightlife activities.
• In a rundown block or neighborhood.
• Next to a school or schoolyard playground.
• Next to apartments or commercial property.
• In close proximity to a freeway, expressway or railroad.
• Next to a gas station, near a municipal garbage or toxic waste dump.
• Odors from factories, farms and processing plant are routinely noticed.
• The city or town is having significant budget problems or is affected by the closing of a major employer.

Location is a big factor in a home’s appraised value. This is most notably felt at the time you sell or refinance. What seems like a bargain when you buy, might turn into a real headache when you try to sell. Drive around the neighborhood and note any adverse conditions. You may think you can live with something adverse for the price, but when it is time to sell you might find buyers won’t.

Adding to your house? Always obtain a building permit. A 600 Square foot addition built without a permit is given no value on an appraisal. When it is time to sell or refinance the frustrations of the building permit process will be worth it. Always save copies of the final sign off of any permits and keep them with your house papers.

Verity that it was built with a permit prior to closing the sale. Don’t just accept the seller’s word. Get copies of the permits before final sign off. Should you want to refinance or sell at a later date, and the appraiser cannot verify the addition being permitted, no value should be given. The Result: no new loan or worse….no sale.

A one bedroom house or condo doesn't appreciate as well and is generally harder to sell.

An advantage of working with a real estate agent is that they can provide you with sales information of similar properties to guide you on how much to offer. Have your agent provide you with recent sales "comps" for similar size homes in the neighborhood. Finding the list prices is also important. Comparing the list prices with the sale prices tells you exactly what percentage of the list price the sellers are getting.

Contact local appraisers and ask about qualifications and familiarity with area. Make copies of the Property Preview Guide and use it to record information about each house you preview to help arrive at a better decision.

TURN-AROUND TIME: Our office contacts the listing/selling agent or owner within 6 business hours of the request. We schedule inspections within 48 hours of the request. The quoted turn-around time assumes prompt access to the property. Our quoted turn around-time is from time of inspection to delivery on your desk.