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Diva, Home Owner in 19606

What do the appraisors take into consideration when doing an appraisal ?

Asked by Diva, 19606 Fri Mar 9, 2012

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Appraisers take a close look at the house, size, features then will compare the subject property to similar homes in a close proximity and recent sale (if possible). They will add to or subtract from the subject property the values of what the subject property has or doesn't have compared to the Comps. Appraisers will likely give less value to a fully finished basement even if it is a daylight basement they you might think.
0 votes Thank Flag Link Wed Sep 26, 2012
The appraiser is mostly concerned about the house, i.e. square footage, bedrooms, bathrooms, garage/no garage, finished basement/no finished basement, etc. They will give less value to land. And they try to work with recently sold comparables that are closest in distance and time period.
0 votes Thank Flag Link Wed Sep 26, 2012
It's important to remember that only RECENTLY SOLD comparable homes are the ones that the appraiser takes into account when appraising your own home - within the past 3 months, or up to 6 months if nothing more recent is available as comparison.

It doesn't matter what other houses in your neighborhood might be on the market for, or even what someone might have paid for a house a year before - even though an appraiser may look at what else is actively for sale in the market, only houses that have actually already gone to settlement are considered as comparables, and they have to BE as comparable as possible (i.e., same neighborhood, school district, within a certain mileage - usually up to 1 mile in a developed area, 5 miles in a more rural area) before the appraiser begins making adjustments to compensate for any differences.

Also the house design, such as comparing ranch homes to ranch homes, 2-story homes to 2-story homes, must also be comparable; square footage should be as comparable as possible; an appraiser doesn't compare a 2-bedroom home to a 3/4 bedroom home because that's a big difference, and so on.
0 votes Thank Flag Link Fri Mar 9, 2012
In simplistic form: They compare your home to others in the same area, condition and size that have sold over the last 6 months.
0 votes Thank Flag Link Fri Mar 9, 2012
How an Appraisal is made:
Visualize a series of COLUMNS, probably 4 or 5;
The First Column is the SUBJECT HOUSE and the others are COMP's.
Down the page we list FEATURES or FACTORS; such as # Bedrooms, # Baths, House Sqft, Lot Sqft, Fireplace, Pool, Roof, Garage, Fencing. Got it?
Now, in each box created, there will be a VALUE: Lets say the subject house is 915 sqft it would get --- or 0. And the first Comp house has 2500 sqft, it might get -100,000; which means that the house is WORTH $100,000 more because of the square-footage. (It is a negative number because the Selling price of that Comp house was approximately $100,000 more BECAUSE of the square footage and we have to deduct that $100,000 to bring them to equity.) Got it?

Now, lets say that the Subject house has $5,000 worth of new fencing and the Comp house has 25 year old OK fencing.: Then the SUBJECT house would get +5,000 and the Comp. house would get --- or 0.

When you go down the page, and enter everything, you get total Comparative Values on the two houses, which allows for the DIFFERENCES.

The two houses DO NOT have to be literally COMPARABLE, they MAKE then comparable with the VALUES.

So the house next door is larger, so what? They made up for that with the values.

Now, if you understand what I just did, then you will understand why;
1.) Two Appraisals can come so close together, and,
2.) Why the Bank will not listen to you about the results.

and in fact I will give you a third;

3.) If you hire your own Appraiser, he will end up with about the same numbers!

Also, please do not compare/equate the ASSESSMENT with the APPRAISAL: The ASSESSMENT is based on the LAST SELLING PRICE OF THE PROPERTY which might be last year. five years ago, or thirty years ago.

I hope I've helped.

Good luck and may God bless
0 votes Thank Flag Link Fri Mar 9, 2012
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