What does an appraiser look at?

scarlett2001May 16, 2011

I would like to hear from those of you, especially in CA, who know what things an appraiser takes into consideration when determining the value of a home. Thanks.

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I know it's changed since the last time we had one done. Last time the guy came out measured the exterior of the house, counted the number of windows and doors and was done.
I'm sure since the housing market took a tumble there's more to it these days!

    Bookmark   May 16, 2011 at 7:27PM
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I can't speak about CA specifically, but any appraiser is also going to look at comps. I'm inclined to believe that is the TOP thing they look at. Then they take notes so see how your home compares to those comps in terms of size, number of rooms and maybe features. If you've had any additions to the house, an appraiser will probably check that you got permits for the work. They may also check the age of the major systems (AC, heater, etc) and roof.

We're selling our house and the appraiser was in and out in less than 30 minutes, I believe. About a week later, some guys came out measuring the land and driveway.

    Bookmark   May 17, 2011 at 9:28AM
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I don't specifically know about CA as I'm in AZ, but sometimes it's also condition. The home we purchased was quite the fixer-upper. The master bath had tiles falling off of the walls and needed to be completely gutted & redone, drywall in a couple of rooms had not been finished, old wood siding badly needed replaced as did the roof. We were buying from a close relative however and planned on doing the remodeling and repairs needed. The relatives had already priced the house accordingly (actually more than) and most of the repairs were things that we were experienced in doing ourselves so it was still a wonderful deal for us.
The appraiser told me that these particular problems had definitely lowered the appraisal.

    Bookmark   May 17, 2011 at 11:11AM
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Are you talking about an appraisal for tax assessment, mortgage, or to decide on a list price?

    Bookmark   May 17, 2011 at 11:52AM
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I'm asking about appraisal to decide on the house's value to sell. And part two - what type of credentials do you look for in an appraiser?

    Bookmark   May 17, 2011 at 8:37PM
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Scarlett most people use comps rather than a appraisal to determine the list price of a house. Realtors I've spoken with say that they look at square footage and lot size of sold houses in order to find comps.

I had an appraisal done in 2006 for a refinance. The appraiser went through my house and noted what had been upgraded. The final report was about 15 pages - you might be able to find a similar report online if you search for "Uniform Residential Appraisal Report". There were comments about the neighborhood, site, improvements (foundation/exterior/interior). The appraiser selected 6 comps and compared features, adjusting the value of my house up or down based on whether the comps had the same number of fireplaces, bathrooms, larger/smaller garage, square footage, etc. So for example, a house with one fewer bedroom than mine was adjusted down $10,000, and a house with one more bath adjusted up $5000. The appraiser didn't go inside any of the comps, so obviously he couldn't compare the conditions of the interiors.

I don't know what part of CA you live in, but in the Bay Area there were quite a few problems when the new Federal rules came out requiring that the lender couldn't choose the appraiser. As a result, appraisers were coming in from the Central Valley with no knowledge of the market on the Peninsula. It was a mess and appraisals were coming in all over the place. So the best thing to do is find a local appraiser, preferably one who's been in business for 10-20 years.

It's very tricky to set a listing price - see my post from last week on that very topic.

    Bookmark   May 17, 2011 at 10:31PM
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The person who was buying my house a couple of months ago had an FHA bank appraisal. He did everything the above poster said. It was more like an inspection. He was here at least two hours, maybe more. I was bored out of my mind, afraid to do anything because I didn't want to mess anything up.

    Bookmark   May 17, 2011 at 11:36PM
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When we sold, I believe the buyers bank arranged for the appraiser. He spent 20 minutes mostly outside the house. He ran through the house measuring each room inside and out. Did not speak to anyone. Never asked a question. My agent handed him a list of updates done to the house and mentioned a comp which should not be considered a comp. He said, "thank you" and left.


    Bookmark   May 18, 2011 at 12:17AM
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The appraisal rules are on on-line for conforming mortgages.

"Never asked a question." The appraisers are forced to pretty much assume anything the seller tells them is false unless verified independently.
Why both asking?

The appraisal guidelines specify what steps must be taken if the note is conforming and salable in the secondary market (Freddie & Fannie).

Lenders who hold notes have a little more leeway.
All they need to do is satisfy themselves (including their underwriting department).

    Bookmark   May 18, 2011 at 11:29AM
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We hired an appraiser before buying our present home because we thought it was overpriced. The seller wouldn't budge. It was less expensive to get an oral report. We could have gotten it 'in writing' later if that would have been useful for our bid. The property appraised 4% lower than asking price. In the end though, as the appraiser said, "If the seller won't take less, and you WANT it...you'll have to pay more." Guess we helped launch 'the bubble'. (This was in 1999.)

    Bookmark   May 18, 2011 at 11:52AM
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