How to Prepare for Appraisal
With the spring home-buying season approaching, the nation's largest professional association of real estate appraisers encourages homeowners to be prepared with all relevant property information when an appraiser visits.
Contrary to incorrect interpretations of appraiser independence requirements, appraisers welcome information that would assist development of a reliable, credible opinion of value. Consumers can accompany appraisers when conducting the property inspection and may provide the appraiser with any information they consider important.
Homeowners should ask their lender for permission to do so, and confirm the appointment. Most importantly, the property owner should take note of whether an adequate inspection is performed. Did the appraiser spend enough time at the property to observe important features or improvements or potential problems?
"The best way for homeowners to combat potential problems with appraisals is to ensure the appraiser hired by their lender is highly qualified and competent," said Appraisal Institute President Ken P. Wilson, MAI, SRA. "Consumers have every right to demand the use of someone with field experience in their market and knowledge to handle the assignment properly."
If homeowners are considering making improvements to the property prior to selling, appraisers can help those consumers determine which projects yield the best return on investment. Typically the basic upgrades -- from painting the walls neutral colors to installing new fixtures -- offer the largest returns. After those, homeowners can add value by undertaking renovation projects that bring their homes up to -- but not beyond -- community norms. Projects known to offer a good return on investment include updating of kitchens or bathrooms, adding a bedroom and improving a home's curb appeal.
When the lender hires an appraiser, consumers should ask:
• What professional designations does the appraiser have and from whom?
• How long have they been in practice?
• What level of experience do they have in this particular market and with this type of property?
• Is the appraiser familiar with property in this neighborhood?
• What types of clients has the appraiser had (homeowners, estates, lenders, relocation companies)?
"Only by reading a copy of their appraisal report can consumers double-check the accuracy of factual information, such as the number of bedrooms and bathrooms and the property's square footage, and question the result," Wilson said.
Source: Appraisal Institute