Saturday, October 15, 2022

What Do Bank Appraisers Look For

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Who Performs Real Estate Appraisals In Massachusetts

What banks look for in FHA Appraisals

Appraisers in Massachusetts are licensed. Licensed appraisers are governed by statutes and regulations, and they must take approved courses and a test to obtain their license and continuing education to maintain their license. The role of the appraiser is to provide an objective, impartial and unbiased opinion about the value of the home he or she has appraised.

What Does An Appraiser Do

  • Real estate inspection: The appraiser closely examines the interior and exterior of your home, taking photos and noting its overall condition.
  • Comparables: After the initial visit, the appraiser researches recently sold homes in your neighborhood. This helps the appraiser calculate the home’s worth based on current housing market values.
  • Final report: The appraiser prepares a complete property and market analysis, which typically includes:
  • Your home’s size and condition,
  • A record of any serious structural issues,
  • Notes about recent home renovations and the surrounding area and

Home inspections are also critical in both the buying and selling process. Knowing what is inspected and what’s not is always good.

The information in this article was obtained from various sources not associated with State Farm® . While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Appraisal Adjustments: Utility Hookup And Sewer Options

Utility hookups and sewer options can impact the value of the land because they influence land development.

If a property does not already have power, water, or sewer, then any buyer hoping to develop the land would need to put them in.

If there arent existing utility hookups and sewer options, it will be difficult to bring in public utilities and you will likely need to rely on alternative systems.

Simply put, bringing utilities to an underdeveloped plot of land is both expensive and time-consuming.

Many times being told there are public utilities nearby is misleading since the cost to extend the utilities out to the lot itself may be prohibitively high.

Not having utility hookups and sewer options can be negatively reflected in a land appraisal.

However, this doesnt mean the land is worthless.

There are many places in the US where landowners rely on private wells and .

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Appraisal Adjustments: The Surrounding Land Uses

The surrounding neighborhood is important for the value of a property as well.

This is why the appraiser will come to see your property.

When a particular property market has a downturn, you may see this reflected in the value assigned to your property.

Likewise, what is being done with other land in the area may be an indication of where the market is headed.

Sometimes areas as a whole transition from rural farmland to residential properties.

A land appraiser may highlight how these changes factor into the lands potential uses.

Whats The Next Step After An Appraisal

What Do Home Appraisers Look For When Refinancing?

Check in every few days with your mortgage loan officer about the loans status.

Loans go through processing and underwriting before they can close, and the underwriter needs to review the appraisal report. The process involves plenty of red tape, and lenders often miss deadlines. Its up to you as the borrower to stay on top of them and demand that your loan close on time.

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Do You Require The Services Of An Appraiser In Vancouver

For a homeowner, an appraisal can make or break a real estate transaction. For the mortgage lender, it can mean the difference between loss and profitability. Why leave it to chance? If you are in need of home appraisers in Vancouver, contact us at Adlaw Appraisals Ltd. We guarantee appraisals that are accurate, speedy and done with integrity. Our uniquely qualified appraisers are ready to discuss your needs and ensure a successful transaction.

Sometimes You Can Dispute The Appraisal

If the appraiser makes a mistake that adversely affects the appraisal, you may be able to dispute the appraisal. This is usually effective only if the appraiser has made an error on the report. For example, if the appraiser lists the square footage of the home incorrectly, fails to mention an important amenity or incorrectly compares the property to homes in a more desirable school district, you could have grounds to challenge the appraisal.

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If You Secure A Good Appraisal

Congratulations! You have completed a major step toward refinancing your mortgage and saving money. Now its time to go through the next series of steps with your loan officer. If youve secured a favorable appraisal, use a tool such as the CFPBs mortgage calculator to research interest rates on a refinanced mortgage for a home of your value. Being armed with these figures can give you some bargaining power when you meet with your lender.

If you want to appeal a low appraisal, you will have a better chance of succeeding if you offer strong data to support your case.

Who Pays For The Appraisal

Buying a Home Pt.5 | What do Appraisers look for, how to prepare

The borrower must pay for the appraisal regardless of whether the loan closes because the appraiser still did the work. While the fee may seem worthwhile if it enables you to get the refinancing terms that you want, it can seem like a waste of money if a low appraisal means that you cant refinance.

Since lenders cannot discuss a homes value or anticipated target value with an appraiser at the time of assignment, homeowners are not able to get an appraisers ballpark estimate of whether their home is likely to appraise high enough for them to refinance before they pay for the service, as they could before the new regulations. At best, you can search for recent comparable sales on websites such as Zillow and Redfin, but these records may be inaccurate or incomplete.

Another option is to ask a real estate agent to do a comparative market analysis and provide you with printouts of recent comparable sales from the multiple listing service , says Bruce Ailion, an agent with RE/MAX Greater Atlanta. Ask nicely, as the agent will be doing you a favorunlike with a home sale, they wont earn any commission from your refinance.

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Be Thoughtful About Your Offer

A hot market can force buyers to make offers well above the asking price. In some cases, buyers may end up agreeing to pay much more than the home is actually worth. If you have extra money to bring to the table, this might not be a problem, but if you dont have extra cash on hand, a low appraisal might mean you cant get financed. To avoid this scenario, you need to know the market. Keep an eye on comparable sales, and hire a great real estate agent who knows the area well.

Land Appraisals: 23 Things You Must Know In 2022

Land appraisals are an essential part of the real estate due diligence process.

As most land buyers do not understand how to value land, a land appraisal can help give you an idea of how much a property is worth and how much should be paid for it.

In this article, well take a look at the top things you should know about land appraisals.

Understanding these factors as a land buyer will help you evaluate whether a property is fairly priced and whether you should move forward with the process.

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Signs Of Water Damage

Water damage brings a host of issues in a home, including mold, mildew, rotting, and more. The appraiser will look for water in the basement, plumbing problems, roof leaks, and any stains on the ceilings, floors, or walls. If there is minor water damage in your home, you may be able to take care of the problem on your own to keep your buyer from walking away from the deal.

Water damage is an important aspect of the appraisal process because mold can cost thousands of dollars to remove. Not only that, mold is also extremely toxic and dangerous to those who are exposed. Mold poisoning can bring on considerable respiratory issues along with a host of other health complications.

Appraisal Adjustments: How Topography Impacts Use

What to Expect During Your Home Appraisal

Topography becomes important for land appraisals because certain types of land have proven to have more potential.

For example, swampy land may not be ideal for development, but it could be left as natural hunting land that has recreational value.

Land appraisers will visit your land and evaluate its topography to determine how it impacts the value.

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Write Down A List Of Upgrades

It can be hard for appraisers to spot the upgrades that have been made to your home since its last appraisal. Thats why its a good idea to write a list of all the improvements youve made so you can pass it along to the appraiser. If you remember the date they were completed and how much they cost, include that information too.

Fha And Usda Appraisal Process

Home appraisals vary based on the type of financing used when purchasing the home. Unlike other mortgage programs, the FHA and USDA loans must meet appraisal guidelines and Department of Housing and Urban Development property guidelines. So your appraiser will look for:

  • The lot to be positioned so drainage moves away from the house, not toward it

  • Handrails alongside steps and stairways

  • A foundation that can withstand all normal loads imposed on it

  • Proper ventilation and fully functional mechanical systems

  • A roof that keeps moisture from entering the home

  • Lead-based paint jobs

  • Defective paint on properties built after 1978

  • Evidence of termites

For a complete checklist of these and other appraisal requirements, refer to HUD Handbook 4000.1.

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What Appraisers Look For In A Refinance

Here are the top factors an appraiser will consider when writing their report:

  • Exterior: They will look at the roof, chimney, deck, porch, and siding.
  • Interior: Is the home safe to live in? Are any parts of the floors, walls, or windows broken? They will check for water damage, infestations, and any issues with the HVAC system.
  • Location: The appraiser will look at the values of nearby homes. They will also see what schools and businesses are nearby and consider the crime rate.
  • Size: How many square feet is the home , and how many rooms and levels are there?
  • Home improvements: If you made any upgrades to the home since buying it especially energy-efficient improvements to the roof, windows, insulation, or other features the home could be worth more.

It’s important to note that even if everything is exactly the same as it was when you moved in, the home value will probably still be different. The value of nearby homes may have gone up or down, nearby attractions may have closed, or the real estate market could be better or worse than when you bought it. All of these factors will influence your home’s value when you refinance.

You Can Challenge A Low Appraisal But Values Typically Wont Change

What is an APPRAISAL – What happens during an APPRAISAL?

If youre disappointed in the appraisers value, you have the option to contest the findings. According to Jacobs, its rare that an appraisal ever goes up after its come in low. Still, you can offer additional data to challenge the report.

According to the NAR®, appraisers can only discuss the details of a report with the client. Since the appraisers client is typically the mortgage lender, you would need to contact the lender with a reason for why the appraiser should reexamine the value.

When would an appraiser be most likely to reconsider the value of a home? Jacobs reveals that youre most likely to see an adjustment if theres an egregious error in material data. Weve found where appraisers have missed some very specific , called a three- bedroom house a two-bedroom house, says Jacobs. And a third bedroom adds a lot of value.

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What Do Appraisers Look For

The value that the appraiser gives your home largely depends on the recent sales prices of comparable properties. All the same, youre mistaken if you think that you cant do anything to help your home come in at the high end of its potential appraisal value.

Getting your home appraised is similar to going on a first date, says Ailion. While you have no idea how your partner will like or evaluate you, being well-groomed substantially improves your chances of being deemed attractive.

So it is with the appraisal, he says. Your property should be neat and clean, uncluttered, and easy to inspect. Any pets should be contained and smells masked. You dont want the appraiser to be rushed to get out.

Heres how certified residential appraiser Ralph J. Vaccari, president of Vaccari & Associates in Marblehead, Mass., describes his approach to the job: Generally, it should not matter if your lawn is not mowed or your house is a mess. Its important to realize, though, that a dirty or unkempt home can increase its appearance of wear and tear beyond normaland that condition can, in fact, affect value.

According to Vaccari, the appraiser cares about the following:

Its a good idea to point out features that may not be immediately apparent that could potentially add to the appraisers opinion of value, says Parsons.

Site: Appraisers Consider Both On

Appraisers look at the size, shape and topography of the lot, including easements and encroachments. The appraiser will also note amenities such as street utilities and vehicular access. Part of the evaluation process includes an opinion of whether the homes characteristics are compatible with the market.

  • Zoning: The zoning classification and whether the property fits legal use
  • Special hazards: Whether special hazards exist and whether the hazard affects the homes value or marketability
  • FEMA flood zone: Whether the home sits in a FEMA flood zone
  • Off-site improvements: The observation of streets, alleyways, sidewalks, lights, curbs and gutters
  • Adverse site conditions: Any other conditions related to the site that could affect the homes marketability and value

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Documents For The Appraisers Inspection

There are a few documents that you should have on-hand for the appraisers inspection when they arrive on your property. If you do have access to them, its good to have:

  • A recent copy of the Property Tax Assessment Bill
  • A plot/blueprint or property survey of the home and land
  • Home inspection reports
  • A list of any recent renovations or additions and their costs

Does What A Home Is Made Of Impact The Appraisal

Sample Appraisal Report with Notes

Appraisers will look at construction materials, particularly the foundation. Newer homes with newer foundation materials and techniques will typically be valued higher, while homes with older foundation materials may take a hit in this section.

The type and age of your roof, new siding, energy-efficient doors and windows, and other features that make homes more energy efficient may increase value.

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Review Comparables Before You Put The Offer In

The bank appraisers and your realtor are going to be looking at the same comparable sales, and your realtor should be providing you comparables PRIOR to writing an offer to make sure that what youre paying is justified. If you know the facts & have sales to support your offered price then youll know that youve made an informed decision and havent overpaid in the first place.

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Did The Home Appraiser Make Adjustment Errors

Sometimes they are not because the appraiser does not know the area as well as they should. A few years ago, this scenario popped up while selling a home in Milford, MA. It became necessary to challenge an appraisal that came in low. I knew there was a pretty good chance the appraisal would get adjusted because there was a factual error in the report and a judgment error when placing a value on the homes location.

However, if both of these things check out, the last resort would be to ask the buyer to get another home appraisal done. There will be a cost associated with getting a second appraisal, so be prepared to put the money up for it.

Keep in mind the buyer may not be cooperative in a situation where the appraisal comes in low. After all, many buyers are going to be looking at the appraiser as a professional.

Buyers certainly do not want to overpay for a property. It would be best if you kept this in mind as you are going through challenging the value. As with any other profession, however, there are good and bad appraisers.

When a buyer does not cooperate after receiving a low real estate appraisal, your last resort to keep the sale together will reduce your home sale price to match the appraisal value.

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How Do Home Appraisals Work

Two types of refinancing transactions do not require an appraisal: the Federal Housing Administrations streamline refinance and the U.S. Department of Veterans Affairs interest rate reduction refinance loan. All other types of refinancing transactions require an appraisal.

Federal regulations dictate how lenders and appraisers must behave throughout the appraisal process. After the mid-2000s housing crisis, the U.S. government wanted to increase appraiser independence to prevent the possibility of lending based on inflated home values. The Dodd-Frank Act and the Truth in Lending Act are among the regulations that require appraisals and evaluations to be conducted independently, based on established criteria, and free from outside influence.

Because federal appraiser independence requirements define a narrow scope of acceptable interactions between an appraiser and loan officers, lenders are afraid that having any contact with appraisers could be construed as violating the law by attempting to influence the appraisers opinion before the appraisal is completed.

Lenders err on the side of caution to avoid the possibility of severe disciplinary action. Loan officers and brokers cannot select the appraiser, nor can the borrower.

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