How to Prepare for the Appraisal Inspection
A typical appraisal inspection will take around 45 minutes for a 2500 square foot home. The appraiser will measure the exterior and interior of the home, take photographs of the exterior and many of the interior rooms, and in many cases, ask you a little bit about your home. Below are a few pieces of information which may be helpful to research in advance of your appraiser’s visit:
- Do you have a survey or plat map of the property and building? If so, you should offer to make it available to the appraiser.
- Do you have information on any written private agreements, such as a shared driveway with a neighbor? Let your appraiser know.
- Make a list of any recent (within the last 3 years or so, generally) home improvements and upgrades, the date of their installation, and their cost (for example, the addition of insulation or roof repairs) and, if available, provide copies of the permits to the appraiser.
- Know of a recent sale in your neighborhood that is not on the local listing service? Mention it.
- Have your homeowner’s association documents on hand? They may be useful to the appraiser.
Other suggestions you may find helpful while preparing for an appraisal
- Do you have Carbon Monoxide detectors? Many states now require that you do. Be sure that they are installed prior to the appraiser’s visit.
- Water heaters must be appropriately strapped per code.
- Make sure that all areas of your home are accessible for the appraiser, especially the attic and crawl space.
- Work on your maintenance items. Make sure to fix small things like any leaky faucets, missing doors, broken windows, missing fixtures, and chipped paint.
- Clear all areas of clutter. A good first impression can mean a higher value for your home if the appraiser is better able to see all of its characteristics.
- Appraisers must report all potential health and safety hazards present in the home to the lender (some examples of health and safety hazards: mold, mildew, infestations, exposed wires, unfilled pools, etc.)
- Getting an FHA loan? Make sure that there are handrails on all stairways, check that each electrical outlet functions properly and is covered, and make sure all utilities are on so a proper inspection of the HVAC system can be performed. More conditions of FHA inspections apply. Here is an informal, but helpful, checklist:
A few notes about how the appraiser determines the value of your home
Appraisers follow specific guidelines when choosing comparable properties for an appraisal done for a mortgage lender. Lenders prefer that comparables be:
- Sales from within the past 90 days (if available)
- No more than 20% difference in square footage and parcel size
- Within the neighborhood – ideally within 1 mile in an urban area and 5 miles from your home in a rural area.
- Of similar condition and effective age
- Of similar finishes
If there are homes outside of these guidelines, the appraiser can use them if they are similar in other, significant ways, but not if it means that the appraiser overlook more recent and closer sales which are similar.
A few things to mention to your Loan Officer prior to the appraisal
- Do you have an addition, out building, or finished room which was done without a permit? Lenders may not consider the market value of the space without evidence of the final permit.
- Is your foundation brick or pier/post? Not all lenders will work with properties on foundations other than concrete perimeter or slab.
- Is there evidence of settlement? If so, has it been reviewed by an engineer for soundness?
- Is your home modular, manufactured, or mobile? Be sure that your loan officer knows in advance of the appraisal.