What Does an Appraiser Look For in a Home?
Understand how home appraisers assess property value through a comprehensive look at features, neighborhood, and market conditions.
A home appraisal is a professional assessment that determines a property’s market value. This process is a common requirement in real estate transactions, such as securing a mortgage or refinancing. Appraisers provide an unbiased opinion of value. Their assessment helps lenders ensure that the amount of money loaned for a property does not exceed its actual market worth, which protects both the lender and the buyer.
Key Property Characteristics Evaluated
Appraisers conduct a thorough evaluation of a home’s physical attributes, inside and out. Inside the home, they examine the overall condition, noting any signs of deferred maintenance. This includes assessing the quality of construction materials, the functional utility of the layout, and the presence of major system updates such as HVAC, plumbing, and electrical systems. The appraiser also measures the above-grade square footage and counts the number of bedrooms and bathrooms. Significant renovations, particularly in kitchens and bathrooms, are also noted for their impact on a home’s value.
The exterior of the property is also scrutinized during an appraisal. Appraisers assess the lot size and shape, as well as the condition of the roof and siding. They look for visible defects or signs of water damage. Site improvements, such as driveways, patios, decks, and landscaping, are considered. The presence and condition of garages or other outbuildings are also factored into the overall assessment.
Neighborhood and Market Analysis
Beyond the physical structure, appraisers analyze the surrounding neighborhood and current market conditions. The property’s location is a key consideration, including its proximity to amenities like schools, shopping centers, and transportation. Zoning regulations and prevalent property types in the area also influence value. Appraisers also consider any adverse external conditions, such as excessive noise or environmental factors, that might affect marketability.
Market analysis involves the use of comparable sales, often called “comps.” These are recent sales of similar properties within the same market area. Appraisers select comps similar in size, age, condition, and features, typically closed within the last six months, preferably within the past 90 days. Adjustments are then made for any differences between the subject property and the comparables, such as variations in lot size, amenities, or recent upgrades. This process helps account for supply and demand dynamics within the local real estate market.
Factors Not Directly Assessed
An appraisal serves a distinct purpose and does not encompass every aspect of a property’s condition. An appraisal is primarily an opinion of value for lending purposes and is not a home inspection. Home inspections focus on the structural integrity, safety, and functionality of a home’s systems, identifying potential defects or necessary repairs. Appraisers, while noting visible defects that impact value, typically do not assess hidden issues or provide detailed reports on a property’s structural soundness or mechanical systems.
Appraisers do not evaluate personal property, such as furniture or decor, unless it is a fixture included in the sale. They also do not offer legal or engineering opinions, nor do they guarantee future market value. Their role is to provide a snapshot of the property’s current market value based on observable characteristics and market data, not to certify its long-term condition or safety.
Preparing for the Appraisal Visit
Homeowners can take several steps to facilitate a smooth appraisal process. Ensuring clear access to all areas of the property, including interior rooms, exterior grounds, and any accessible attics or crawl spaces, is important. This allows the appraiser to thoroughly examine all relevant components of the home.
Gathering and organizing information about the property can also be helpful. This includes preparing a list of recent home improvements or significant updates, along with their completion dates and estimated costs. Providing documents such as property surveys, homeowners association (HOA) information, or permits for major work can give the appraiser a more complete picture of the property. While appraisers look beyond superficial aesthetics, maintaining a tidy and clean home can present it in a more favorable light, signaling good overall maintenance.