14 Mar Single Family Appraising
The purpose of completing a single-family appraisal is to provide a clientele with a reasonable and supported estimate of fair market value. There are many reasons and purposes for needing an appraisal, and the concept and procedure of appraising is often misunderstood by homeowners and other professionals. Real estate appraisers render a judgment or estimate of valuation. There is no such thing as an extrinsic property value, as value is only and ever determined by open exposure of the property for a determined amount of time in the market followed by a transaction or sale of said property.
Thus property value only exists when a property is sold. All else can rightfully be called opinion or estimate. Thus the appraiser provides an estimate of value which can also be a range of value, highlighting the inexactitude of this trade.Real estate appraising can be broken down into three categories: the inspection of the subject property ( the subject property is the residence being appraised), which includes exterior measurements, an interior walk-through of the property, and taking pictures of each room, including bathrooms.
This also includes a complete analysis of the condition of both the interior and exterior of the home which is an integral part of the appraisal process. Many people assume that appraisers are similar or at least is knowledgeable in some ways to the whole house inspector. This is a not true, as appraisers are trained primarily in market valuations, and are not considered to be experts in itemizing repairs and repair costs. This is best left to the licensed whole home inspector and building contractors, as this is their specialty.
Appraisers have a cursory knowledge and understanding of property condition. They can render their own judgment on repairs, however brief that may be. During the inspection property, homeowners can be very helpful in pointing out to the appraiser the various upgrades and remodeling they have done to the property and the time-frame of such upgrades. And likewise they can point out the various items in disrepair, those needing replacement. Common sense and a close inspection by the appraiser will usually allow for most items to be noticed and cataloged for later use in the appraisal report. This would include kitchen and bathroom upgrades and condition, flooring condition, condition of walls, doors, electrical fixtures, interior lighting fixtures and in fact, any interior cosmetic issue, including if the property was recently painted inside.
A common misunderstanding among homeowners is that appraisers are supposed to climb on roofs and go beneath houses. To the contrary, appraisers never climb on roofs because of liability problems and Ian expertise. Nor do they usually go up in attics or in crawl spaces under homes. This might be done conceivably if the property is FHA funded, but even then most appraisers don’t have the skills or training to assess any dysfunctional issues. Appraisers can notice both interior and exterior dry rot conditions in a home, but usually not the extent of the dry rot which is left to a professional to determine. A home that is in good condition can usually be determined almost immediately upon entry. Most people take pride of ownership of their properties which can make the appraiser’s job much easier.
They do not have spend additional time and energy to look for deferred maintenance problems that do not exist. This is not always true of rental properties, REO (real estate owned), and short sales. Many of these types of properties do have deferred maintenance and require of the appraiser more time at the property noting these problem areas. Fortunately, lenders do not require the appraiser to render professional judgments on property conditions. They expect some level of training and expertise, but certainly not to the level of professionalism.
What they are most concerned about is that the appraiser not omit any area of concern in their report. they wanted itemized list of problems noted; however, do not expect any kind of cost breakdown for repairs. Often times, however, either a homeowner or a lender/ broker will have procured the services of a whole home inspector, and will provide a report to the appraiser. This would include an itemization of repairs and costs, and can be used by the appraiser in his or her report.
Sacramento Valley Appraisal: (916) 407- 5540