Sellers: The Importance of a Home Appraisal

Dated: 10/01/2018

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The Importance of a Home Appraisal

8/15/2018


An Appraisal of Real Estate Market Value
 is an estimate by a trained appraiser of the most likely price at which a property will change ownership, with neither the buyer
 or seller being under pressure to buy or sell. Until there is an actual property sale, an appraisal is just an estimate of probable market value. A lender will require an appraisal to fund the loan.

Only a state-licensed appraiser can make professional real estate appraisals. Any other evaluation, such as a real estate agent's estimate of market value, is not an appraisal, but rather an opinion of value.

Is an Appraisal an Art or a Science?
During the last 10 years, there have been many attempts to make real estate appraisals more accurate, especially with automated valuation models (AVMs). This includes websites such as Zillow, Trulia, Realty Trac, etc. Although computers have changed real estate appraisals there is no substitute for the experience of a real estate appraiser to interpret the recent sales prices or comparable nearby houses and condos, which determine the true market value of a specific home. Equally important, an expert appraiser is needed to evaluate if the local home sales prices are rising, falling, or "normal." So far, computers haven't been able to replace this judgment test.

AVMs can be very valuable to help estimate market values. But appraisers will always be needed to verify valuations, especially in neighborhoods of unique, one-of-a-kind homes.

How to Get an Accurate Appraisal

Market value depends on many variables including recent home sales in the area and the home's unique features. Here are a few tips to assure an accurate appraisal:

  1. Get the home into tip-top condition. If you own the home and need an appraisal for mortgage refinancing or another purposeaim to put the home into its best "model home" condition before the appraiser arrives. Because appraisers often inspect three or more houses each day, and can't possibly remember each home's special features, it is best to hand the appraiser a list of the residence's special features, especially those that add market'wet value. Also, if you know of recent nearby home sales prices, be sure to hand that information to the appraiser.
  2. Always accompany the appraiser. Either the real estate agent or the homeowner should always accompany the appraiser to facilitate the inspection, and answer the appraiser's questions. Be sure to point out the home's special features and benefits that the appraiser might miss during the inspection. "I was able to get a higher appraisal for the buyer by pointing out to the school boundary" according to Courtney Silverman, Realtor, The Keyes Company.
  3. Insist the lender promptly provide the borrower with a copy of the appraisal. Technically, the appraisal belongs to the mortgage lender who hired the appraiser, even when the homeowner or home buyer is paying for the appraisal. If the appraisal comes in low, the home buyer, real estate agent, and homeowner should have immediate access to that appraisal to correct any errors.

Although an appraisal is still very much an art, rather than an exact science, computers continue to help make residential value estimates more accurate. Know that a licensed appraiser will always be needed to verify the facts and use them to arrive at expert valuations.


Looking to sell your home? Get info on your home's value.

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Courtney Silverman

• I KNOW RESIDENTIAL REAL ESTATE • Full-time top producing Real Estate Professional 18 yrs+ • Marketing, Negotiating skills, Competence & Ethical standards • Get your home sold - ASAP for top ....

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