November 12, 2020

Seller Tips: 5 Key Things Appraisers Look For During A Real Estate Appraisal

We recently covered some of the most important real estate terminology to know, and we’ve been getting some questions about what exactly appraisals are, how to prepare for them, and how they work. To help you better understand home appraisals, we’ve put together a quick guide to the 5 key things appraisers are looking for during a real estate appraisal — keep reading to find out more!

The first and most important thing to know about home appraisals, is that they are completed according to standard known as the Uniform Residential Appraisal Report by Fannie Mae. This report includes a set of standards that determine the scope of an appraiser’s inspection, based on a few key factors such as:

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1. Property Size

The size of the lot and the size of the home itself are all important considerations. An appraiser will be concerned with the total square footage and the home’s functional layout, as well as the number of bedrooms and bathrooms — more bedrooms and bathrooms means a higher expected value.

4. Home Improvements

An appraiser will be very interested in any improvements you made to your home, as well as the quality of those improvements. Upgrades to your kitchen or bathroom, upgraded appliances, or smart technology, all make your home more desirable, and will be will be considered by the appraiser to determine your home’s overall value.

3. Home Interior

The condition of the home’s interior is just as important as its exterior. Appraisers will check the materials and condition of the windows and doors, flooring, plumbing and electrical systems, the number and quality of appliances, the kitchen, bathroom, and all other important parts of the home. They will also check for health and safety issues, such as fire escapes and handrails.

2. Home Exterior

Serious attention will be paid to structural aspects of a home, specifically its foundation, the walls, and roof. These checks will determine the integrity of those three major components, as well as any defects or damage in the general construction. Any problem with the roof or foundation can immediately deem the home unlivable.

5. Comparable Properties

A home’s location also has an impact on its value, since appraisers refer to the prices of homes in the neighborhood that have similar age, size, and construction to the home being appraised to help determine its value.

Keep in mind that an appraisal is not an exact science, but rather an opinion of a home’s value based on the comps and the actual condition of the home. Appraisers are looking for any items that can affect the home’s value, and the final valuation will be based on real estate market trends, current sale prices, and the specific characteristics of the home. A final appraisal report includes the information used by the appraiser, details about the subject property, and the explanations of the valuation results, and the report will be given back to the lender, who will then use it as a guide before making a decision about a loan.