Recently there has been a change in the home appraisal process, resulting in more regulation. Appraisers are now usually chosen in a lottery system.
When working with the Veterans Association on a VA loan they are the ones operating the lottery system. No one involved in the transaction, not even the lender, has any ability to choose the appraiser. Outside of VA loans, larger lenders have a larger pool of appraisers they work with… Bank of America and other large lenders, as you can imagine, service a huge geographical area… often, so do their appraisers.
It’s not uncommon in these situations to get an appraiser from a far off land (OK, I am exaggerating just a bit, but they are often from outside the market place) to provide a valuation for your home. Since we all know that real estate is local, this can result in a “bad” appraisal.
Appraisers who do not understand what neighborhoods are more comparable to others may pull comparables from neighborhoods that simply don’t make sense. Or, if they don’t often work in the market, they may not realize that (for example) in Winchester, a split foyer home sells well and in Reston a contemporary home is highly desired, but both of these housing types are considered “dated” and less desirable in Leesburg, where people seem to crave colonial style homes. Desirability determines value in any market.
I tend to encourage my buyers to use smaller, local lenders for a myriad of reasons. One advantage is that they have a smaller pool of appraisers who generally work smaller areas. While these lenders are still not permitted to “hand pick” their appraisers (to prevent fraud), they do have better quality control over the “pool” of appraisers, and the end result is a more accurate appraisal.
When selling or refinancing your home, your appraisal can affect your ability to get your loan, so make sure you know your “comps.” “Comps” are simply market comparisons that reflect other homes that have sold in your neighborhood, zip code, and area. Review these comparisons by calling your agent of choice (hopefully me) for comparisons BEFORE your appraiser visits to make sure that all recently sold homes are included in the current statistics.
If your home is for sale, we’ve already been through the “presentation” checklist – and this still applies for the appraiser. If you’re refinancing, take a few minutes to look at your home as though you were a home buyer, as checking that your home appears well-maintained is vital. Spend some time cleaning the home entrance and painting as necessary to spruce up the entry, making your best first impression. The rest of your home should be clean and clutter-free, as well. Appraisers assume – like most people – that if your home is dirty you don’t take good care of the mechanics, but if it’s clean, surely all the nooks and crannies are in great shape as well.
There are some things you can hand to your appraiser when they visit:
- They would love you to give them a floorplan and plat, for starters – because they will have to create one if you don’t give them one.
- List of selling features of your home – the view, size, location, bump out, “options” when the home was built – anything that makes it better than most of the homes your house might be compared to.
- List of recent upgrades and updates, and include costs if they were significant (a $45K kitchen remodel is much more impressive than a $10K kitchen remodel; and be sure to include anything that improves energy efficiency – this is a focus in today’s market).
- Listings for comparable properties with notes about the significant differences between your home and the one that is there (backs to highway, doesn’t have a basement, etc.).
If I have listed your home you can rest assured that I will be providing this information to your appraiser – I may meet them in person or just provide the information electronically to them in advance.
If you’re refinancing, then I can still help you get these things together – just give me a call.
Once completed, an appraisal may take a week or so before you can get a copy, but do get a copy. If the appraisal is lower than you need, there are ways to request changes, and I can help you with that, too, so that you can accomplish your goals.
Don’t hesitate to call me if I can help! Remember, with me, you’ve got a friend in the business!
Thinking of selling or refinancing? Check the comps – order a free report at www.SalesInMyNeighborhood.Info