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, the seller, the real estate agent and the mortgage lender or bank to go smoothly.
Most homes being sold or refinanced are assessed in “as is” condition and are not subject to minor cosmetic repairs. The appraiser will appraise the property exactly as it is at the time of the 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 informed of these problems before the inspection.
The following documents will help expedite the process and benefit the appraiser in performing 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 easements or encroachments
* The Deed or Title that determines that the property is Simple Domain or Leasing and Land Rent Payments
* Most recent property tax bill and legal description
* Home inspection reports, termite reports, and well and septic tank reports
* Any list of major home upgrades and improvements
* Current Real Estate Listing Agreement and Contract and Addendum
* HOA Agreement or Condominium Agreements and Fees
The appraisal process usually takes 15-20 minutes inside the home and another 15-20 outside the property, which includes taking pictures and measuring the dimensions of the home. Every property owner 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 access to the attic is open to the appraiser, access to the basement or basement 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 trim, and painting any trim that is chipping or peeling.
FHA inspections require several repairs to be completed prior to the inspection. Some of these repairs are handrails on all stairs greater than two steps, smoke detectors, and correct peeling or peeling paint in homes built before 1978. Attic and basement need to be inspected.
The above suggestions will help expedite the appraisal process because most homeowners don’t realize that the majority of the appraisal process takes place before and after the inspection with comparable listings and sales research and taking photos of all sales and comparable listings. The actual writing of the appraisal report, drawing the sketch map, installing flood maps, locating maps, and submitting the completed report to the lender.