5 Things to Know About Appraisals

Having a solid understanding of the appraisal process can help you get a fair deal when selling or refinancing your home.

Though all appraisers are bound to act in accordance with the Uniform Standards of Professional Appraisal Practice, or USPAP, appraisal is not an exact science. Appraisers use their skills and knowledge to give their best opinion of how the value of your home compares with similar homes in the neighborhood. Here are some things that you should know about how this process works:

1.       Appraisals are unbiased. Whether it was you or your lender who ordered the appraisal, the process results in an impartial opinion of the value of your home. An appraiser uses a home inspection, property information, and market research to determine an accurate value for the home for a specific time period. The appraiser will not factor in any personal issues that you may have or any reasons that you may need to sell right away.

2.       Home values can change quickly. An appraisal is merely a snapshot of your home’s value at a certain date. If you decide to sell your home three months after an appraisal has been completed, the market price may be higher or lower depending on how things have changed, and you will likely have to have your home re-appraised. If you know that you will need an appraisal at a future date, you can ask for something called a prospective appraisal. Let your appraiser know that this is your intention.

3.       Appraisals can be used for different purposes. Appraisals being used to figure out your home’s market value will likely result in a number that is slightly different from appraisals being used to determine your property taxes. An appraisal for insurance purposes, for instance, usually determines the cost of what it would take to rebuild your home from the ground up rather than what the market price is.
If you ordered the appraisal, make sure the appraiser knows for what purpose you ordered it and what your interest in the property is. If your lender ordered the appraisal, ask what criteria were used to make the final determination of value.

4.       Appraisals rely on accurate information. Don’t try to withhold information from an appraiser or misrepresent the facts. Your appraiser needs accurate information to give you a fair value, so if you are asked to provide a property tax bill or other information, do so. Not giving this information may delay the appraisal process and may result in an appraisal that you are not pleased with.

5.       You can ask for a second opinion. If you feel as if your home appraisal is inaccurate, you can ask another appraiser for a second opinion. Be aware that you will need to pay for this second appraisal yourself, but in many instances it may be a small price to pay in order to sell your home at its true market value.

What have been your experiences with home appraisals? What are your tips for getting an accurate value?

This is a guest post from Amy Burweigh, who works in marketing and real estate at Aim Your Way.  Aim has provided a variety of property maintenance and preservation services as well as inspections for over 20 years and can be found at www.aimyourway.com.  Connect with Amy on Google+.