What Do Appraisers Look For When Determining A Property’s Value?

Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property.

A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection.

However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property.

The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property.

While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling.

The Key Components Addressed In An Appraisal

The Site:

Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features…

Design:

Quality of construction, finish work, fixed appliances and any defining features

Condition:

Age, deterioration, renovations, upgrades, added features

Health & Safety:

Structural integrity, code compliance

Size:

Above grade and below grade improvements

Neighborhood:

Is the property conforming to the neighborhood?

Functional Utility:

Is the property functional as built – style and use?

Parking:

Garages, Carports, Shops, etc..

Other:

Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home.

When entering your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items.

Be sure to have all carbon monoxide and smoke detectors in working condition.

Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing.

If you’re interested in what specifically appraisers are looking for, here is a copy of the blank 1040 URAR form that is used by every appraiser in the country.

Related Update on HVCC:

Appraisers hired for a mortgage transaction on a conforming loan are chosen from a pool of qualified appraisers at random. Neither you nor your lender has the flexibility of deciding which appraiser will inspect your home.

This recent change was brought on with the Home Valuation Code of Conduct HVCC, and is effective with conventional loans originated on or after May 1, 2009.

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March 29, 2010 by · Leave a Comment

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About Lester

In 1973, I graduated high school and started college. In 1977, I met and married my wife Deborah of 40 years, put on a suit and tie, and went to work for Prudential Insurance Company. In 1979, my wife was offered a great job as an advertising executive for a San Jose television station, so we moved from the Monterey Bay area to San Jose, CA. I needed a new job in San Jose and I didn’t really want to start from scratch with a new insurance office. While going to college, I had managed a Travelodge, and it was that management experience that landed my new job and started my career in real estate as a property manager. In 1980, I completed my first certification course with the National Apartment Management Accreditation Board (NAA), and in 1983, I earned my Certified Apartment Manager (CAM) designation which I keep current today. In 1984, my daughter Pearl was born, and in 1987, my son Max was born. When I was managing rental properties, many of my tenants wanted to become homeowners, so in 1988, I got my real estate sales license with the California Department of Real Estate to help them with that goal. As a new Realtor, I found that obtaining financing is the first and most important step to shopping for a home, so in 1989, I completed my first of many programs in real estate finance and loan officer training. In 2000, I stopped doing property management and real estate sales altogether, to concentrate on mortgage loan origination exclusively with Coast Capital Mortgage. In 2004, I moved from Coast Capital Mortgage to join First Priority Financial. In 2014, First Priority Financial changed its business model from mortgage brokerage and banking to just mortgage banking. To better serve my clients and stay a competitive mortgage broker, I joined C2 Financial Corporation. How many people can truly say that they love the company that they work for? I can! ◾C2 Financial Corporation is a mortgage brokerage and a banker. ◾They are A rated and accredited by the Better Business Bureau. ◾Members of National Association of Mortgage Brokers ◾FHA and VA approved. ◾Managed by principals with over 62 years experience in the mortgage industry. ◾Partners with the largest banks in the U.S. ◾One of Scotsman’s Guide Top Mortgage Originators of 2012 and 2013. I’m a lucky guy that loves my job and the people that I work with. Every day borrowers entrust me with one of the most important financial decisions of their life and I don’t take that responsibility lightly. I do what is best for my clients and know that by doing so I’m not only doing what is morally and ethically right, this belief system will result in my borrowers referring me additional clients, which is the best long-term business model. So far so good!

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