What Do Home Appraisers Look For In A House?

what do home appraisers look for

An appraiser determines the value of your future home. So what exactly does an appraiser do? When you want to take out a mortgage, you get lost in a maze of words and concepts. In this blog, we have another term whose role is not always clear. 

What do home appraisers look for, and why is it important to know a valuation? It remains one of the most critical parts of getting a mortgage. The purpose of a valuation is to confirm the sale price for the lender. We will explain what exactly an appraiser is and what his activities are. At the end of the explanation, you will have more insight into the appraisal process when buying or refinancing a home.

What Does An Appraiser Do?

A home value estimator must always be independent to properly assess the value of a home, in this case, the house you are about to buy. The appraiser estimates the value of the home and issues a valuation report. This can generally be used for selling a home and, in your case, purchasing decisions. 

Because the home value is fixed for all parties involved, you know where you stand. 

In addition, a home valuation is mandatory because the house serves as collateral for the mortgage. If the house is worth less than what you paid for it, this can affect the amount of your mortgage.

Cost

The home appraisal costs are generally borne by the buyer and depend on several factors. Some appraiser charge a fixed price while others may ask for a percentage of the home value. 

Requirements

There are several requirements that the valuation report and the appraiser must meet. For example, the quality of the valuation report drawn up must be assessed by recognized valuation validation institutes.

Arrange a home valuation

A home valuation is only done once you have agreed on a purchase price with the seller. You can have the valuation arranged by the appraiser, but you are also free to choose a recognized appraiser yourself. Keep in mind that with an appraiser, it remains clearer, and he can give you a clear indication of time. So anything is possible with an expert appraiser.

What Does A Home Appraiser Look For?

To establish the price of a property that one wants to sell, it is necessary to know top things appraisers look for and which factors the evaluators appreciate the most, as well as the other technical and legal aspects which influence the final value of the evaluation.

Size and layout

To calculate the value of a house or an apartment, the price per square foot is usually used since this figure is one of the most important parameters when calculating the valuation of a house. In addition, the layout, size and type of rooms are very important aspects appreciated by the appraiser.

Quality and materials used

The structure of a house says a lot about the people who live in it and the builders who built it. The evaluators, therefore, look at aspects such as the quality of the materials, both inside and outside.

A clear example is that if the house was built with moisture-resistant materials it is likely to have a higher average rating than surrounding homes that were not built similarly.

Age of the home

A new building or apartment is not the same as a 40-year-old building. The older it is, the lower the appraisal value. This aspect is important because it is influenced not only by the number of years but also by other factors such as the state of conservation, both inside and outside.

Lighting and energy consumption

Energy consumption affects a home's rating not only because a well-lit and efficient home will consume less but also because natural light has a positive influence. So any homes with lots of natural light tend to have higher value because they are warmer and more comfortable. 

Here, we will go into other details:

  • Materials
  • Wall insulation
  • Exterior cladding of the building
  • Other factors such as energy certifications

Additionally, if you have a well-located and well-lit home, you can be sure that the expert will consider this positively.

Location

Similarly, it is a factor that influences the price and the sale since, as everyone knows, desirable locations always have higher home prices. Therefore, it is not surprising that the location impacts the price of the assessment.

The general condition of the home

As you know, if you have a garage, a terrace, or a storage room, this influences the price of the home and also affects the valuation. In condos and other multi-family buildings, elevators are also another aspect that is valued. Remember that many potential buyers, such as people with reduced mobility or the elderly, are more likely to buy if there is an elevator.

Administrative costs

Certain technical and legal factors influence the value of an appraisal. One of these factors is the property's load and who owns it. Social housing assessment is not the same as that of normal housing. Therefore, the appraiser considers this factor and other legal factors that relate to aspects that may have an influence in the future.

Now you know what home appraisers look for and how you can apply for a mortgage or get a price for your house if you want to sell it. Knowing this provides added value when preparing to sell and putting your house on the market.

Be sure to read our other real estate blog posts for further information on preparing to sell your home.

Upgrades and renovations

If you want your home assessment to be even higher, consider renovating or remodelling your home and making some upgrades. There are many things people look for when considering buying a home, but sometimes people don't even know they are looking for certain things, but they fall in love with the home because of them.

When trying to find things home appraisers look for to increase the value of home, you might consider replacing the garage door, re-facing the house, or adding a deck to your home.

If you don’t know how to prepare for a home appraisal, don't think about what you want from your home but what potential buyers are looking for. Don't personalize your home with flashy colors or structures that most people don't like. While this can make your home unique, it's harder to find a buyer with the same taste as you.

Exterior features

Appraisers not only evaluate the interior position of the home they also take a deep look at sheds, decks, and porches. You are responsible for giving the note of landscaping to the appraiser. Landscaping is the first thing a buyer sees while purchasing a house.

The Analysis Services Of A Certified Building Appraiser

A good evaluator also analyzes:

  • Land and property use;
  • The age and longevity of the building;
  • Real estate sales in the neighborhood;
  • Sales of building land in the vicinity, if applicable;
  • Building income and expenses;

The Estimate

Finally, all the elements mentioned above allow your building appraiser to offer you an accurate and reliable estimate of the property's value. Through this rigorous review, the assessor:

  • Analyzes the replacement cost of the property and the calculation of depreciation;
  • Analyzes the rental conditions in the case of an income property;
  • Estimates the cost of financing and the specific tax implications;

Combining the results obtained through these appraisal methods allows the building appraiser to determine the property's market value.

What Do Home Appraisers Look For In A House? Final Thoughts

An appraisal usually does not take very long, an hour on average. In addition to a thorough inspection, the appraiser will also ask the owner many questions. To shorten the time and ensure that all parts of the house are included in the report, it is wise to send the appraiser an overview in advance of the renovations, updates, and other matters that are important for the condition of the house.

What home appraisers look for is the main question when deciding who to use. Don’t choose an appraiser on the base of low or high prices. A higher price does not ensure that the appraisal services are good, but a lower price may be a bad sign. Make sure the appraiser is licensed. A confident appraiser ensures you that your project is in safe hands. A trusted appraiser is necessary for your house valuation.

Appraisal value vs. purchase price

The bank calculates your maximum mortgage with the appraised value of the house and the purchase price, depending on which is the lowest. If your purchase price is lower than the appraisal value, there is nothing to worry about. Your maximum mortgage is then equal to the purchase price.

Valuation lower than the purchase price

But it also happens that the home's value is lower than the purchase price. For example, you had to overbid to buy your dream home. Then your maximum mortgage is equal to the value appraisal. You may not borrow the difference between the appraisal value and purchase price and must pay with your own money. If you do not have enough savings (or equity), you will not be able to finance the house.