Home Appraisals And Their Role In Fire Insurance Coverage – What do appraisers look for when appraising a home? A home appraisal is an important part of the home buying process, as it determines the value of a property. When making an offer Realtors use appraisal addendums to include multiple offer situations, which is the important role of an appraisal for both buyers and sellers. Understanding how the appraisal process works can help both buyers and sellers be well prepared, as there are several key items an appraiser looks for when conducting a home appraisal.
Last week we wrote an article about what home inspectors look for and this week we are writing about what appraisers look for! Let’s dive into our article that answers the question: What do home appraisers look for?
Home Appraisals And Their Role In Fire Insurance Coverage
In this article, we’ll discuss how the home appraisal process works, what to expect before, during, and after a home appraisal, and how to properly prepare for appraisal day. While the appraisal process can sound daunting to both buyers and sellers, there are several ways to be well prepared that will help your home appraise.
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A home appraisal is an estimate of the home’s value. It is typically determined by having a licensed appraiser inspect the home and research the prices homes have recently sold for in the area. Before buying a home, a mortgage lender will ask for a home appraisal to make sure the home is worth the amount the seller is asking. For example, if a seller lists their home for $450,000 and you offer $435,000, the mortgage lender will want to make sure the home is actually worth $435,000. If, after evaluating the house, they find that the house is only. worth $ 415, 000, they may only want to borrow $ 415, 000. This means that your real estate agent will either help you to renegotiate with the seller about bringing the purchase price down to $ 415, 000, or you as the buyer will have to come up with the money to make up the difference between what your mortgage lender is offering and what the seller is asking for the house.
Homeowners can also request an appraisal when refinancing their mortgage. A lender will typically request an appraisal to ensure they are not lending more money than the home is really worth. After the appraisal is complete, the mortgage lender will determine how much they will lend for the property. So what do appraisers look for during a home appraisal?
When comparing your home to other homes in the area, the size and overall condition of your home will primarily be taken into consideration when conducting their analysis. If you own a 3 bedroom home in Raleigh, North Carolina, the number of similar 3 bedroom homes for sale in the Raleigh area will be compared when determining the value of your home. In addition to conducting an analysis of comparable homes in the neighborhood, they will also review the physical condition of your home and the qualities that cannot be changed, such as square footage, area, and other factors.
Before getting too granular, the appraiser will note general details of the home, such as the materials used throughout the home, the condition of the property, and any alarming physical aspects of the property that may affect its habitability. This is one of the first things appraisers look for! If something looks structurally wrong or dangerous to live in, they will take note. They will also check the general maintenance of the home, such as missing door handles, leaking pipes, and other maintenance-related issues. While they will not focus on whether the house is clean or not, they will look for signs of neglect, including broken windows, damaged floors, broken appliances, cracked walls, broken doors, torn carpets, etc.
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Appraisers will look at the location of the home. When making an appraisal, the appraiser will consider the location of the home. Location plays an important role in the value of a home. They will evaluate the home’s proximity to desirable schools, a low crime rate, and the home’s proximity to a hospital, fire station, and police station. They will evaluate whether the home is located on a busy road or if it is close to the owner’s home, tenant’s home, or foreclosed property. It will also be noted whether it is located in a suburban neighborhood or a rural/urban area. In a highly desirable area such as Plaza-Midwood or Myers Park which are two of Charlotte’s best neighborhoods, homes will be valued higher than in less desirable areas. Appraisers will also consider surrounding homes in the neighborhood. Are they primarily single-family homes, apartment buildings, or commercial properties?
One thing many people don’t count on that appraisers look for is the age of the home. There are pros and cons to both new and old homes, so a home doesn’t necessarily warrant an appraisal just because it’s new. Older homes are sometimes better preserved and located in historic districts while newer homes can come with problems. However, the age of the home will play a role in the evaluation process. New construction is still more valuable than homes built a century ago.
A home appraiser will take the time to review the exterior of the home to ensure it is structurally sound. They will look for any signs of water damage or other problems, such as a chimney that is cracked or leaning away from the home (which could indicate structural damage) as well as a damaged porch or stairs leading to the home.
The quality of the roof will also play an important role in the resale value of your home. Damaged roofs bring infections, leaks, and other problems, so the appraiser will evaluate the quality of the roof. If you know of a problem with your roof, talk to your real estate agent before spending tens of thousands of dollars to fix it. It may be more cost-effective to lower the asking price of your home rather than putting tons of money into installing a new roof. In addition to the roof, the appraiser will also inspect the condition of the siding, garage, porch, deck, and any other exterior elements.
How Much Does A Home Appraisal Cost In Texas?
If your home is very dated and hasn’t been updated in years – or decades – the appraiser will take that into account. If the house is outdated, it will appeal to a limited number of buyers and may be more difficult to sell.
Water damage brings a host of problems to a home, including mold, mildew, rot, and more. The estimator will look for water in the basement, plumbing problems, leaks in the roof, 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 yourself to prevent your buyer from walking away from the deal.
Water damage is an important aspect of the assessment process because mold can cost thousands of dollars to remove. Not only that, but mold is also very toxic and dangerous to those exposed. Mold poisoning can bring significant respiratory problems along with a host of other health complications.
When appraisers value your home, they consider other homes of similar size in your area. Your home’s square footage and number of bedrooms will be taken into consideration when determining your home’s value. The home appraiser will also evaluate the size of the lot the home sits on. The size of the garage will be a contributing factor, as a home with a 3 or 4 car garage will rate higher than a home with a 1 car garage or no garage at all.
Replacement Cost Value(rcv) Vs. Actual Cash Value(acv)
The appraiser usually spends more time inspecting the interior of the home. An appraiser will evaluate the structure and general condition of a home. When evaluating the interior of the home, they will typically start with the number of bedrooms and bathrooms and whether or not there is a basement, attic, or crawl space. They will take note of the quality of the home’s foundation and evaluate the materials used on the floors, windows, and walls.
While they will typically not pay much attention to cosmetic details, they will take note if the house is particularly run down. They will look at doors, windows, ceilings, walls, and any leaking pipes or visible electrical problems.
If any room in the house – especially the kitchen and bathroom – has been renovated, the appraiser will take note. Energy efficient appliances or other ecological aspects of the home are also a plus. They will also remember a fireplace or a porch, patio, or fence around the house.
If your home has central air conditioning instead of individual air conditioning in each room, it may rate higher. The appraiser will also assess whether your heat is fueled by oil, gas, or electricity and will note any outdated heating and cooling systems.
After A Fire Loss, Dealing With Your Insurance Company
Any additional improvements made to the home, such as new hardwood floors, a new garage or front door, a new roof, new siding, etc. will also affect your home’s appraisal.
While the appraiser will not perform a full pest inspection, they will look for signs
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