The Appraisers Twenty

There are twenty things that a professional appraiser may need to know about the property when determining its value. These twenty are:

  1. The comparable on the date of the sale and future market trend
  2. Its value based on location
  3. The site/view both looing at the property and looking from the property out
  4. The design and appeal of the dwellings floor plan and amenities
  5. The quality of construction
  6. The age of the property and any improvements
  7. The status of permits on all improvements
  8. Condition of the property
  9. Total number of rooms and square footage of each
  10. Number and types of rooms (i.e. bedrooms, bathrooms, etc.)
  11. Square footage (gross livable area)
  12. If there is a basement or attic
  13. If there is a basement, if it is finished. If it is a finished basement, the number and the type of rooms and if it is a walkout
  14. If the property is functional (good, average, fair poor) and if there are any obsolescence
  15. If there is central air conditioning and the kind of heat available
  16. Amount of car spaces (i.e. garage, carport, etc.)
  17. Any special features that the property has to offer (i.e. porches, patios, pool, fireplaces, skylights, solar power, etc.)
  18. If there has been any special financing or special sales considerations that might have impacted value for the comparable properties, and if there are any offered on the subject property
  19. If the money market is affecting value and, if so, how (present value analysis)
  20. If there are any out of the ordinary motives of the seller on comparable properties

Home Buying: Appraisal

Home values are constantly in flux. Market values increase, decrease, or stabilize. These changes can happen daily, weekly, monthly, or over an extended period of time, based upon that particular market area. There can even be spots within the same city that are doing one of each, at the same time. Due to these changes, there is a need to determine current values for properties, which is why lenders hire appraisers when working on a new loan. The lenders want to be able to assess the risk of loaning a certain home.

To assist the lender in this decision, they hire an appraiser to “evaluate” the property. It is then up to the appraiser to come to an objective opinion of value – Uniform Residential Appraisal Report. The appraiser will select comparable properties and make adjustments based upon the condition and features of those homes. NOTE: The lender’s appraisal is not used to determine market value, it is used for the lender to verify the security for the amount of the loan.