Are you planning to move out of your current residence permanently? If you own your home and aren’t renting, then your best option is to sell the house. However, you need to find an estimate of the value of your home before you can put it on the market.
Home appraisers give you professional unbiased estimates of your home’s actual worth. However, you don’t have to be selling your home to require the service of a home appraiser. Many situations may require home appraisers.
You’ll also need home appraisals for tax reasons — to know the amount of property taxes — and when you need a mortgage loan for investing in real estate. When you need a mortgage loan for refinancing a current mortgage, you’ll need an appraisal too.
Home appraisers are humans, and, as such, are prone to some mistakes. These mistakes could be detrimental to your home’s value, and thus put you on the losing end.
In this piece, we’ll look at a few common mistakes you’re likely to encounter during your home appraisal. Some may be honest, and some may be unprofessional mistakes by your home appraiser.
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The Home Appraisal Process
By now, you should have a good idea of what home appraisal is, but we’ll describe it more formality. A home appraisal is the process where a professional home appraiser estimates your home’s value for the reasons mentioned above.
The appraisal process is pretty straight forward. You may need an appraisal after a prospective buyer has inspected the house. For the case of mortgages, you’ll be the one doing the home inspection.
If satisfied, you or the buyer, depending on the case, contacts the home appraiser. You have to pay the appraiser in both situations, whether you’re selling or buying the home. Typically home appraisers charge between $300 and $500.
What Will the Home Appraiser Check?
First, the appraiser will examine the external factors. These factors include:
- The zoning classification
- The size of your lot
- The type of neighborhood— whether urban, rural or suburban
- Car garage, and type and condition of the driveway
After considering all external factors, the appraiser then checks inside. Here are some of the most important things they check:
- Size of the home in square feet
- Type of foundation
- How many bathrooms and bedrooms the house has
- The home’s building materials particularly windows, walls, and floors
- If there’s a basement or attic
- Whether the baths or kitchens are remodeled
They also check the general condition of your home. However, don’t worry about torn curtains, dirty dishes, or unmade beds. Cracked walls, broken windows, and creaky doors are, however, a cause of concern.
The process will take about three to twelve hours. However, make sure your home appraiser is licensed and certified. Most appraisers strictly follow these guidelines, (Uniform Standards of Professional Appraisal Practice.)
After getting all the house details, the appraiser then checks the property value of other surrounding establishments. This is what they call the comparable sale or “comps.” “‘Comps” are essentially sales of properties within a mile radius in the last three months.
Finally, the appraiser compiles a report and sends it to all concerned parties. The report summarizes all aspects of the appraisal and gives the final value of your property.
Some Mistakes Home Appraisers Make You Should Look Out For
Most home appraisers are good at what they do, but they make a few mistakes once in a while. Rarely do these mistakes overvalue your home. They mostly undervalue it.
Here are a few mistakes you should keep your eyes peeled out for. That way, you can get the true market value of your home or get the correct real estate valuation.
1. Using Only Price Per Square Foot for Your Home’s Appraisal
This mistake is pretty common among new appraisers. Doing so could work against you if you have invested heavily in the home’s interior. It could also overvalue property and increase your mortgage loan amount.
This act shows unprofessionalism, and you might want to reconsider that home appraiser. There’s a pretty huge chance your home will be undervalued.
2. Using Unreliable Comparables
Using comparables that don’t seem to correlate with your current home is a common mistake too. You can’t really blame the appraiser because they have followed the protocol.
However, in some instances, the house appraised within the last three months may not be a true reflection of the house market value of your neighborhood. A true value would be of a house similar in build and furnishings with yours.
3. Listing a Home With Inaccurate Price Per Square Footage
This is somewhat linked to the first point on appraising only using price per square foot. There’s nothing worse in appraisals than a lower price per square footage. This is because this factor is a significant aspect of determining your home value.
On the flip side, overestimating the area will make you overprice your home. Any sane house buyer will label your home a rip off and won’t buy the house. Either way, you lose when this happens.
4. They Don’t Use Bracketing in CMA
CMA abbreviates comparative marketing analysis. Most appraisers may use this technique as an alternative to determine your home’s worth. If so, do inquire if they have factored in bracketing.
Bracketing basically involves looking at market prices of homes similar, inferior, and then superior to the property. Doing so helps the appraiser get a good estimate of the home’s actual value.
5. They Make Wrong Adjustments
Adjustments are on the more technical side of things. However, understanding adjustments is not rocket science. You’ll find adjustments on the grid page, before or after the comparables.
If the adjustments in the report seem unreasonable, then quickly notify the appraisers. They will quickly make the necessary corrections and give you the real house value.
Don’t Compromise on the Value of Your Property
A home is a huge investment, and you should expect nothing lesser than the actual value. Despite the expertise and professionalism of home appraisers, they are predisposed to mistakes. You stand to lose too much if your home is undervalued.
Look out for these five mistakes, so you don’t end up losing in the end. Don’t be afraid to ask any questions if you feel the need to. Lastly, ensure your home appraiser is licensed and certified so you won’t be hoodwinked.
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