Many homeowners have a question on their mind about how to prepare for a real estate appraisal on their property. The appraisal in many cases is the most important part of the buying and selling process that allows the transaction between the buyer, seller, real estate agent and mortgage lender or bank to go smoothly.
Most homes that are sold or refinanced are assessed in “as is” condition and are not subject to minor cosmetic repairs. The appraiser will assess the property exactly as it is at the time of inspection. Minor repairs or any work that has not been completed will be taken into account in the final valuation process. Any work that has been contracted to complete, such as a new kitchen, new bathroom, or addition, will not be considered. Be sure to fix any major repairs, like a leaky roof or a damp basement, because most lenders won’t lend money when these problems exist. There are special loan products for these types of problems, but the lender must be made aware of these problems before the inspection.
The following documents will help expedite the process and will benefit the appraiser in the development of the appraisal.
* A plot plan or site map or a survey of the house and land. (it is readily available)
* Information on the last purchase or transfer of the property in the last three years
* Title policy describing any easement or encroachment
* The Deed or Title that determines that the property is Simple Domain or Leasing and Land Rental Payments
*Most recent property tax bill and legal description
* Home inspection reports, termite reports, and well and septic tank reports
* Any list of major upgrades and improvements to the home
* Current Real Estate Listing Agreement and Contract and addendum
* Homeowners Association Agreement or Agreements and Condo Fees
The appraisal process usually takes between 15 and 20 minutes inside the house and another 15 to 20 minutes outside the property, which includes taking pictures and measuring the dimensions of the house. Every homeowner is different, some property owners want to walk the appraiser through the inspection process while others let the appraiser inspect the property on their behalf. Most appraisers don’t care what each homeowner is comfortable with and as long as the homeowner is available for any questions the appraiser may have about the property.
Other suggestions are to make sure attic access is open to the appraiser, basement or basement access is readily available, and access to the furnace or furnace, electrical panel. The appraiser suggests that minor repairs should be corrected, such as missing switches or outlet covers, leaking faucets, loose or missing doorknobs, any installed trim or molding, and repainting any chipping or peeling trim.
FHA inspections require several repairs to be completed prior to inspection. Some of these repairs are handrails on all stairways with more than two steps, smoke detectors, and proper chipping or peeling paint in homes built before 1978. Attic and basement inspections are needed.
The above tips will help streamline the appraisal process because most homeowners don’t realize that most of the appraisal process takes place before and after the inspection with comparable sales and listing research and taking photos of all sales and comparable listings. The actual writing of the appraisal report, the sketch drawing, the installation of flood maps, location maps, and the submission of the completed report to the lender.
