Gaithersburg, MD (PRWEB) December 23, 2009
Appraisal values continue to be controversial in the industry, and given current market conditions, it is at the forefront of concern for most homeowners and mortgage lenders. The person getting a disproportionate amount of the blame is the appraiser. Just like one should not blame the weather man because it's raining, the appraiser should not be blamed because values have dropped. The reality is that home values are down. In most areas, the majority of homeowners are already, or are close to being upside down, owing more than the home is worth. This is reality.
Brian Coester, CEO of Coester Appraisal Group, offers some tips observed from first hand knowledge and experience stemming from personally appraising over 10,000 homes and from Brian's company, Coester Appraisal Group, appraising over 200,000 homes. Some tips are obvious and some are not so obvious. Nonetheless, the advice offers the best bet in getting the highest legitimate appraised value. These tips are not to trick the appraiser into a higher value; these tips enable a homeowner to put their best foot forward to get the most from the home appraisal.
So what does an appraiser look for during the inspection?
There are some basic motives when an appraiser arrives to inspect the property. They want to get the tour, get an idea of the home's quality, the renovations, and assess the positives and negatives, and the overall feel of the property. They will take pictures, measure, walk around, look around, and ask a lot of questions. Then just a soon as they arrive, they leave and the homeowner will be left wondering if the property appraised for the expected worth, or even close to it. The inspection is just a one quick part of a much longer, in-depth analysis that takes place at the appraiser's office. The inspection of a property is the fun part. The work begins when the appraiser collects and analyzes hundreds of pages of market data trying to match-up and compare the homeowners property, the subject property, with properties in the area, and then draw a conclusion from the information.
So what can a homeowner do?
The biggest determinants are already complete and this is the location, neighborhood, and the overall quality of the home. There is little that can be done to change the neighborhood and the layout of the home over the weekend so it is best to leave this alone. When an appraiser inspects a property, they are trying to figure out what classification of quality it falls into within the specific market area. The market area is just simply the area in which a buyer would look if they were looking to purchase the homeowners home, and the homeowners property was not for sale. Each market area has neighborhoods, and each has its own unique set of home standards and buyer expectations. Within each neighborhood, there are homes on the low end that are typically not in very good shape and sell cheaply; there are really nice, well kept, and renovated homes that sell for much higher; and then there are the middle-grade homes that sell for about what the average property sells for in the area. Of course, not every home falls into an exact category, and there is a gray area. What an appraiser will do is naturally categorize the subject property based on how it compares it to other properties in the neighborhood.
They will ask themselves, is the property being appraised on the higher-end, the lower-end or middle-grade and choose comparables accordingly. Because of this, it is extremely important for the homeowner to prepare for the inspection as this is the one shot to put a best foot forward to achieve the highest value. Remember, this is just an appraisal and a professional appraiser's estimate of the value of the home. It is not the sole determinant of the value. Studies have found appraisals to typically be within 5-7% of the homes real value and should be considered a gauge.
So what else can be done to achieve the highest appraised value?
1. Make sure the home is nice and clean. It may sound like common sense, but as the saying goes, common sense isn't that common. An appraiser is going to look at the overall quality of property and get a feel for the market appeal. Just like buying a car, an offer would be less on a dirty one versus a clean one, even though they were identical in every other way. The appraiser is going to look at things the same way. They will look at the cleanliness of the home, take photos of various rooms and factor this in when selecting comparables selection and determining adjustments. If the inclination is to hire maid or run to the home center for a steam cleaner remember, the appraiser is just looking for general cleanliness and upkeep, not FREAKY clean. The dining room table does not have to be set and door handles do not have to be polished. The home should be respectably clean and tidy.
2. Fix all the little things on the to-do list. Every homeowner has a few things they have been meaning to fix for weeks, months or even years and with all good intentions, and just haven't got around to it yet. But like Tony Robbins says "when would now be a good time?" All of these little things that haven't been fixed like; the broken sink, missing handrail, hole in the drywall and the 100's of other things that break easily in a home that do not require immediate repair quickly add-up. These things could possibly prevent the homeowner from getting a loan and will negatively affect the value of the home. Be on the safe side, spend a weekend and repair all those odds and ends so the home is ready to go when the appraiser arrives.
3. Don't provide the appraiser with comparables. Industry "experts" often suggest contacting a Realtor or the tax office to pull local sales of similar homes in the area based on the opinion of the homeowner. Brian warns, having been born in the appraisal business, DO NOT DO THIS! For one, it is a waste of time since the appraiser is going to pull their own comparables regardless of what the homeowner provides. Then, chances are the homeowner selected comparables will not be the best comparables, or even close to usable comparables. However, if the appraiser does look at them and takes them seriously, the appraiser may end up confused or offended. Brian cannot count the number of times when a homeowner or a Realtor provided totally unusable comparables that are so overpriced and not similar to the subject property that he often wonders what planet they were from. An appraiser does not want help picking their comparables, so just stay out of their way and let them do their job.
4. Have a copy of an old appraisal readily available. This is a very valuable tool to hand to the appraiser. Why? First, it shows what and how another professional appraiser previously valued the home. Second, it provides a basis for their appraisal and will help speed the process along. If the appraiser can look at what another appraiser did and see their logic, their adjustments, and how they approached solving the problem of estimating a market value, the homeowner will be well on their way to getting a faster and more accurate appraisal.
5. Make a detailed bullet list of the improvements. The list is a MUST! The appraiser is only in the home for 30 to 45 minutes, an hour at most. No matter how detailed they are, the appraiser could never know as much about the property and its value-adding features as much as the homeowner. The problem is, during the inspection, folks are so busy showing the appraiser around and being hospitable, that recent updates, renovations and features are often forgotten to be fully mentioned. The thing to remember is to be detailed, honest, and provide full disclosure. Everything means something, and anything completed recently to improve the home is worth noting and worth writing down. These notes should be handed to the appraiser when they first arrive so when they are walking around, all of the beautiful features and aspects of the can be pointed out and shown off.
6. Have a survey ready. This is not as big of a deal if the property is a townhouse, but if the property is detached with acreage, or on multiple lots, a survey is an absolute must. County tax assessment offices do not always keep the most accurate up-to-date records and sometimes the information on the land is not available. Having a recent survey to give to the appraiser will greatly increase the chances of a better, more accurate appraisal, and will ensure that the land and site is properly accounted for. If the property is waterfront property or is adjacent to a park, knowing how much of the land is attributable to waterfront or parkland is a valuable tool in assessing the value of the lot as well as placing a value on the location, and ultimately the home.
7. Have information on any distressed sales or recent lower than normal sales in the area. Appraisers believe it or not are not perfect, and can sometimes get blinded by the trees and not see the forest. The homeowner should tell the appraiser if a neighbor recently lost their home to foreclosure or a house was condemned. The reason for this is agents and MLS systems often do not have detailed information on every property. If a neighboring home sold for $50,000 and the appraiser can not find any information on why it sold so low, they might take that information at face value. If there are very limited sales and no reason not to use that home, then they will use it and say they were no other better comparables. This is totally legitimate. Due to this, it is a good idea to know a little bit of information on any recent distressed sales. By mentioning the information, the appraiser might want to do a little more investigation.
7.5 Let the appraiser do their job. Everyone's home is never worth as much as they think it could be. Typically, appraisers are correct and they are doing the best they can with the information they have on the home and other similar homes in the area.
About Coester Appraisal Group
Headquartered in Gaithersburg, Maryland, has earned a solid reputation for personalized service, open communication, and attention to detail. They have the skills, technology, and experience to create a positive and seamless process for lenders, government agencies, hedge funds, and attorneys to name a few.
-- Orders can be entered into Coester's Apache tracking system with a secure user name and password, or imported from a client's LOS system.
-- Over 30+ "touch points" of communicating status are available and tailored to the user's role.
-- Reports are communicated within 24-48 hours of inspection
-- 24/7 on-line access to order status. The client user has the ability to review and post comments, upload, and download documents.
-- Reports are stored online. There is never need to call Coester's office for an appraisal report.
For additional information about the company and its services please visit their website at http://www.coesterappraisals.com or call (888) 485-1999 Option #2 to reach the sales department.
SOURCE: Coester Appraisal Group