How Does A Home Appraisal Work?
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- Опубліковано 24 лют 2020
- Everything you need to know about how a home appraisal works, the timeline, and how to save an appraisal if it comes in too low.
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A home appraisal is required if a buyer is purchasing a home with a mortgage. So how does a home appraisal work? An appraiser is someone who goes out to the property that is going to be purchased and is going to give an opinion of the value of that property. And Appraisal is not a home inspection. It will only tell the lender how much the home is worth for the lender knows if they're willing to give out a loan with the property as collateral. A home inspection is different because it helps the buyer understand the condition of the property instead of the value.
So what does an appraiser look for in a home appraisal? An appraiser is going to look at the exterior of the property as well as the interior to make sure that the value is supported by market comparable properties. The appraiser is also going to look at improvements that have been made in the home to see if there has been an increase in value since the last time I was purchased. An appraiser normally is going to use what's called a sales comparison approach to find the value of the property. The sales comparison approach to find the value of a home appraisal is where an appraiser looks at forty five different comparable properties within around a mile radius to see what the market normally has been paying for similar homes.
Do appraisers know the selling price? Yes, the appraiser usually will get a copy of the contract and will be able to see the selling price of long with any credits given to the buyer. The appraiser uses this as another datapoint to help them determine the value of the property. So, having a contract or a selling price is helpful for the freezer to understand what buyers are willing to pay for the property.
What happens if the appraisal comes in low? If an appraisal comes in low then buyers and sellers can challenge the appraisal through a reconsideration of value, or the buyers can renegotiate the price, or the buyer can come to the table with more money at closing .
An appraiser is first going to have the buyer pay for the inspection of the home, normally this is around $500. After that, the appraiser is going to contact the listing agent or the seller and schedule a time to inspect the property. After the appraiser inspect the property, the appraiser will send the full appraisal report to the lender and the buyer so they can see the condition of the home along with the value and all the supporting information as well.
A home appraisal is not too complex. It is mainly a multiple page document that helps lenders and buyers understand the value of the home with market support. This helps buyers not overpay and helps lenders not lend too much money. This helps both buyers and lenders be in a better position to sell if they need to future.
Hey, my name is Kyle and I'm a Loan Advisor serving Tennessee, Florida, and Ohio. I help you get a crystal-clear home loan so you can win the house you love.
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As an appraiser, I appreciate you making this video! Shedding some light on an important step of the home buying process.
Thank you so much for watching!! :)
In your opinion, how much does an improvement like a retaining wall in the backyard add to the value? We spent 20k, the wall created usable space and added 5000 sq/ft of sod. Your opinion would be appreciated!
Hi! I’m curious, do appraisers look at whether add ons on a home are non permitted? For example a sellers converted a carport into a un permitted garage? So technically the home does not have a registered garage
Adam.
Please read my question above on appraising with no comps to speak of in the area. Thank you so much.
@@mannypelayo7370hey I know this is a really old comment, but figure I would answer anyways. One thing to note is the contribution value of improvements are often not equal to the cost of improvements. For example, an inground pool may cost $70-100k to install (Ontario Canada) but will only add about 25K in value because that’s what the market values it as.
Landscaping is very expensive and it often adds very little value (unless extensive). Think of a buyer viewing your home. Will they see that retaining wall and say: ‘wow I’ll pay an extra $25K for that!’.
Most likely not. It’s hard to say how much it really adds in value, but the return on the cost would be very little.
What an excellent video, straight forward and informative. Thank you.
I really appreciate you for making the video. It’s very clear and easy to understand for a person who is new.
Glad it was helpful! Best of luck!
Thanks for sharing in details of the appraisal. I appreciate you. Excellent!
My pleasure! Thanks for watching. :)
I got a good understanding of how the appraisal work. Thanks. Nice video.
Glad it was helpful!
I listen to these videos for accurate information, but your voice is so soothing.
Wow, thank you! I'm on live right now, see you!
Thank you so much for this. I really like how you made it easy to understand for beginners like myself.
Glad it was helpful! Thanks for watching!
Can't believe I just found your channel after doing home buying research for over a year now! Been binge watching your videos! They have been very helpful!
LOL! thank you!
Your voice is very soothing Kyle. I’m binge watching your videos. Im a first time home buyer, pre approved for $400k but man , I don’t expect how tough the competition was buying house here in Washington state😩. There’s a lot of buyer due to low mortgage rates but not much house in the market, driving multiple offers for a house, about $20-40k above asking price .
Thanks! It's tough out there, especially with such low inventory! Hang in there!
Rein - you are so correct! We are building a new home in Washington and dealing with multiple offers has been crazy.
We struggled too but then started to look at homes that had been a bit longer in the market
Same thing in Ohio. Start searching for someone willing to sell for sale by owner
Thank you so much for this. I’m a buyer and the the appraisal was completed yesterday. This video is so helpful in helping me understand the process. Thank you once again for this video.
Glad it was helpful!
I have a residential appraiser interview tomorrow thank you this was helpful.
Thank you so much for watching!! :)
I found your videos very informative. I do want to add that now... 2 years after this video... a lot has changed in the appraisal profession. Increasingly appraisers are being restricted from doing independent appraisals by the GSE's. WHAT? Yes... appraisers have to back into generally accepted GSE guidelines in order to not raise red flags... that means staying conservative, not giving listings weight in final value, making sure line, net and gross adjustments are within the 10%/15%/25% "best practices" - as they are not "guidelines" yet everyone uses them - including state board investigators. Then there's the CU system. Appraisals better fit that and not raise any red flags. The result... a very UN-independent process where price increases are not generally tolerated by CU or GSE's and where appraisals are forced to conform to pre-determined price ranges and ratios. And to think that the last crash appraisers were blamed for high appraisals. Appraisers can only report what is going on in the market - they do not control the market. Yet, blame is already being placed on appraisers. The GSE are now pushing the desktop appraisals with 3rd parties doing the inspections YET the appraiser has all the liability. They really do hate appraisers.
this was a really well made video, that earns a bug thumbs up from me.
Thank you so much for watching!! :)
Very informative and I really appreciate your insight.
Thanks a bunch 🙂! I learned a lot with your video 👍👍👍
Glad it was helpful!
this is solid to the point info, thank you.
Glad you think so!
Ty so much for the info! I love your vids!
Thanks for watching!
Man that was some great information thanks 🙏
Wow! Thank you!
Thank you, great video. Great form of explanation.
Thanks for watching. :)
The most informative video I've seen. Thank you
Glad it was helpful!
Check out his other videos. Hours and hours of learning!
Thank you very well explained!!
Glad you enjoyed it! Thanks!
This was helpful! Thanks!
Glad it was helpful!
Awesome video! it helped me understand the appraisal process.
Glad you liked it!
What an educational video this is! Lordy, you did what countless classes I've taken haven't explained very well. Thank you!
Glad it was helpful!
Thank you so much , you’re awesome !
You're welcome, and thank you for watching!!
dude i seriouslly love you bro
Thank you so much for watching!
Great needed to know thanks
Glad to help!
Thank you for this video❤
My pleasure! Thanks for watching. :)
I’m waiting on the appraisal to happen and I am so nervous of the valie outcome. I’m hoping it comes out to be at our contract amount. 🤞🏽 Maybe less but we just need to move out from our rental asap.
Mann🥵
Any update
I'm in your shoes now. We are moving south for work and school. We are buying and in a time crunch.
Can I buyer get out of a deal is the appraisal comes lower? And not loose they earnest money deposit?
yes if you have put appraisal contingency in your contract, you can back out from the deal during that time till the appraisal contingency is valid
I'm going to echo Adam a bit in that I am an appraiser, and this video is a great 30,000 foot view of an appraisal. However there are a few things I feel should be mentioned.
1. A one mile radius works great in Urban markets, but in more suburban to rural markets distances will increase greatly.
2. Replacement Cost Estimate is the Cost Approach to an appraiser, and is GREAT in residential markets IF the appraiser actually knows how to produce one.
3. I will only provide the appraisal to the borrower IF the lender tells me to in writing. Otherwise, it's the lenders job to get the appraisal to the borrower.
Overall, great video.
Who's Adam? Haha. I'm Kyle :)
Thanks for the additions!!
@@WinTheHouseYouLove, was referring to Adam Monroe that also commented.
Great video. Thank you Sir.
Hi Sir, glad you liked it! Thanks for watching! :)
This is the best video on this subject without the loud, fast talking bells & whistles etc.
Glad you liked it! Thanks for watching. You can also check my new uploads. Hope you will like it as well. :)
Your voice knocked me out 😴. I woke up and rewatched 😂. Thanks for the information
Sorry! 😂 Thank you so much for re-watching!
I've learn So much with you!
Awesome! Thank you!
Good information, I've always wonder about this process.
Thanks for watching!!
Kyle Seagraves → winthehouseyoulove.com
My SP is a property appraiser in the SW Florida area, owns his own company and I'm worried for him. I'm glad that I can get an inside look at his job. How many homes can be done on average in a week?
This is a great video!
Thank you so much for watching!! :)
I have a house that needs refinancing. It's gotta be worth over 85k it's a cabin style on 2 acres. Things that worry me about appraisal. We are in the middle of remodeling. We inherited the home. We took out the old cabinets and right now have crappy ones, they work but there's no countertop. The walls and ceiling and floor aren't done. We have the materials sitting around as we slowly work on it. This week we put up part of the ceiling, it's a very different design with wood paneling that's going to take a while. The home doesn't have any major issues. We need to finish the walls, we have them up and they need putty and paint etc. We're only financing 30k. Im wondering your opinion on this.
Answered my questions
My lender waived the appraisal. I have a conventional loan with 20% down but my loan officer told me that they waived the appraisal. I think underwriters did a desk appraisal? I’m in the Northern Kentucky/Cincinnati market. Would it be a good idea to have an appraisal anyway?
thank you so much
Is it true if the appraised value is higher than the list price but lower than my offer that I have to come up with the difference when purchasing a home ?
Thank you for your videos. Are the appraisals based on homes that are currently listed or homes that have closed.
Homes that have sold, and must be within a neighborhood area and similar (i.e. comparable). Listings can be in the appraisal yet are seldomly given weight.
I'm hoping that the appraisal comes out to be the contract amount. I ain't accepting a lower amount than the contract offer on selling my home.
If the appraised value comes back as higher than the purchase price, do property taxes get assessed based on the appraisal or the purchase price?
Thank you so much for putting this information. I am about to make an offer as a home buyer.
Question: If the appraisal price fell short of an accepted offer price, and the seller does not want to lower the listing price, would I be able to back out of the deal, getting the full refund of earnest money?
Sure as long as you didn’t waive you’re appraisal contingency. Many people are waiving that these days. I wouldn’t!
Currently on that process . First time homebuyer, sooo nervous 😣
Best of luck!
Thank you for your video. Can you inform me where can I take the course/certification in Florida ?
You're welcome! you might want to check this link, hope it helps: www.myfloridalicense.com/dbpr/re/documents/RERDrequirements.pdf
Great videos!
Glad you like them!
Hey thanks for the content. I have a question on
how to proceed.
Currently my father is in charge of the mortgage
and I saw he has a high int. Rate and we're going
to refinance with a lower rate. HOWEVER, my
concern is about the appraisal. We plan on fixing
the house but aren't sure to do this before the
appraisal as we may end up having to pay more
for the house. Should we wait to do the home remodeling after the appraisal?
Appraisals are not pubic record, but improvements can add to value. Remember, take half off what you pay for improvements, (labor) then divide by 5, and that is what the added value to your home is worth.
Great job
Thank you!
I am waiting on the appraisal step right now. I offered $5k over the asking price with a $2k appraisal gap. I just wanted to note that not all types of loans will let you offer an appraisal gap, according to my lender. I'm glad mine does, because I didn't know to ask about it. Also, my appraisal fee is $650. That seems a little high, especially for a house under 1,300 sq ft... in Mississippi. I was wondering if my lender could have price-shopped that a little more. Not sure how that works, and I'm too shy to ask at this point. Thanks for the info!
Hey Christina! Congrats on getting to the appraisal step! All loans allow an appraisal gap since it’s not a feature of any loan type. Appraisal gaps are features of a purchase contract, so you can use them with any loan. $650 is average for an appraisal. Some go as high as $1,200! It just depends on the market and availability of an appraiser. Good luck with the rest of the process! 😊
@@WinTheHouseYouLove Thanks SO much! I'm learning a lot from your channel.
Update- right now here in Arizona appraisers are not entering homes, they are just doing drive-by appraisals.
Also, how does the appraiser fairly take into consideration what the proposed sale price of the home while factoring the appraised value? Surely the lender discloses the sales contract to the appraiser. It’s discouraging knowing the appraiser is working for the lender and surely this affects their decision making.
Normally the appraiser gets to see the purchase contract because it's a data point. What a buyer is willing to pay for a home is a large considering for how much the home is worth on the market. Because, if someone is willing to pay X for it, the chances are that it's worth very close to X to the market.
The appraiser actually doesn't work for the lender. The appraiser is required to be independent based on AIR compliance laws. Appraisers are assigned on a round-robin system from a pool of pre-vetted appraisers and they get paid no matter what value they appraise the property at, even if the deal falls apart because of the appraiser.
The appraiser is going to appraise the home based on recent sales activity..... NOT on the contract price. I've done 10 appraisals for purchases this week and 3 of them didn't appraise for contract price. Those 7 that did appraise at or above contract price may think the appraisals just "Hit the number" but those other 3 know that Us Appraisers aren't messing around! The existing market data determines the trends and values.
Oh, Also, most Appraisers are simply self employed contractors such as I am. I work for almost 50 different banks and lending institutions. I don't get pressured by ant of my clients to 'help their deal close', and if I did, I would fire them/stop taking their assignment requests. Good Appraisers are still unbiased and professional, even when people complain because they didn't get 100% of what they wanted. People complain the values are high, low or whatever, but the data is always contained within the report. If you have a legitimate complains about the quality of work, the comps used or the value being wrong or biased, you can complain to the state license department and the bank as well.
I have a house that was listed as a 3br but was a 2. And was listed 85k higher than all compared homes and yet no one could agree that it wouldn’t appraise. Total nightmare
Sorry about that!
How are the appraisal costs determined?
For mortgage refinancing to lower monthly rate, does the appraiser perform the same task to determine the value? I'm worried the interior condition of my house may not qualify me to refinance. Hope that makes sense. I'm new to refinancing.
Yeah, normally it's a full interior and exterior appraisal.
If your home appraised when you purchased, you shouldn't run into an issue unless the inside of your home is now destroyed for some reason.
Nice!!
Thank you! Cheers!
Thank you so much for the video. One quick question, does the appraisal have to come through to match the loan amount or the purchase price?
Ideally. Best of luck!
Hey man great content like always, quick question i had my refi appraisal done today. When I bought my townhome in 2018 my Square feet was 1692. So he shoes up and says i dont need to measure the sqfeet I already have it. I asked what was the number he got and he said 1652! Then he asks if i had something different i said yes 1692 from when i bought initially purchased it. He said something about the stairs don’t count? Two story townhouse. He told me not to worry about it but thats like $3600 for those 40 sqft! Any suggestions/comments?
Hmm, should be included in the square footage from my understanding. You would only need to worry about it if your appraisal comes in short and messes up your refinance.
If that happens, talk to your lender and they can escalate the issue to the appraisal manager.
Kyle Seagraves → winthehouseyoulove.com
Win The House You Love Thank you.
Whatever the appraisal comes in at for example, 200,000 and you agree to pay the asking price of 210,000 "appraisal gap" . Is the bank lending you only what the appraisal comes in at like the 200,000 ? and is your loan monthly payments based on 200,000 or 210,000 ?
How do appraisals work if the seller is "Selling As Is". We found our dream home a few weeks ago and this is the case with the seller. I am worried that since we will be first time home buyers that we will lose the home due to it being sold as-is. The home was used as a rental property and the renters did a number on the house and that is why they are selling it as is. PS love your videos they have been a wealth of knowledge for us as we try and move forward with the home buying process.
If it's being sold "as is" and the appraiser requires repairs to be done, you'll have to front the money and pay for the repairs. Then, the appraiser will need to do a final inspection to make sure the repairs are complete.
It's crummy when a seller does this, but hopefully the repairs won't be too costly if any are needed to be done.
So if the appraiser can't access areas in the home, the buyer is hit with another fee if the appraiser has to come another day? But it isn't the buyers home to make those changes. Seems unfair.Thanks for the clarification 👍🏾
If I were the buyer’s agent, I would negotiate for the seller to pay for the reinspection
Currently under contract now... my realtor told me that the house was appraised at 4k more than purchase price. Then he said the underwriter may have an issue in regards to some external rot on the wooden siding. He said we could fix it quickly and have it appraised again. Now I'm confused... isn't the underwriter just looking to make sure the appraisal came in at or above the sale price? Sound right to you?
No, the underwriter wants to make sure the value and condition are good.
They're using that home as collateral for the loan, so they want to make sure it's in acceptable condition
@@WinTheHouseYouLove Thank you!
I have a question. You stated that the buyer pays for the inspection but if the house has say, a blocked attic and he cant get in, then he leaves and charges another fee to come back? Is that correct? I'm new at this and just trying to get the picture.
Since this video is on appraisals, I'm assuming you're talking about an appraisal inspection.
Yes, the home is supposed to be accessible. If the appraiser cannot access parts of the home, they will have to come back when cleared and charge another trip fee. The appraiser will not take on the legal responsibility of moving the seller's property, even if just a box.
great video
Thanks!
Does a state tax appraisal count?
Question: so a FHA appraisal came to a full value but the same house did 14,000 lowe in a VA. Anyway I was play by my listing agent, I was play again by this same listing agent. Yes, got fired. Denied knowledge of whom the appraisal was on the FHA. Both stick for 6 month, but why a FHA comes to value but not a VA?
Can they use my supposed sales priced they doubled my appraisal based on that , iwas told someone called in or disclosed my sales priced, know in arbitration, but all the other properties around still have the original value, i think there trying to get me first then get them on the bases of my sales price
How many days have the appraisal to give the report?
Hi Kyle, my wife and I are refinancing our house and lowering our mortgage term from 20 to 15 year. The interest rates are so low that we can drop 5 years off our term and our monthly payments will actually be a little lower than what they are now. Problem we are having is we had to get an appraisal done and it came back lower then we thought it would. We were hoping it would appraise higher then it did to take the PMI off as well. We are not that far off from where we need to be. What are some things we can do to challenge the appraisal? The lady we are financing with said to find some comps that would support our claim that the appraisal should have been higher. We've been in talks with our realtor and she is helping with finding comps but what other things can we do to challenge the low appraisal? Thanks
Great!
You can find comps, but in my experience, an appraiser rarely changes their opinion of value.
An option you have is actually getting another appraisal done. Now, you'd have to change lenders to make that work. Your current lender can't re-order a new appraisal. But, a new lender can. However, there is no guarantee the appraised value will be higher with a new appraisal.
If you're close to the PMI coming off, then personally I'd continue with your current refinance and wait a few months for the PMI to drop off when you hit 20% equity.
I agree, the best option would be find another appraisal and hope its evaluation is higher than the first one . Good luck 🤞😃!
what happens if the buyer is already living in the home and is just purchasing it from the owner who doesnt live in the home. I imagine the place will still be tidy but will it interrupt the appraisal with furniture and living people inside the home?
It will need to be accessible to the appraiser
So when an appraiser is doing sales comparison, they look at the listing price, not the asking price?
Great audio. Where is the microphone from?
Thanks! it's a Neumann TLM 102, you can get it online or tech stores? I guess 😅
How do kitchen or bathroom upgrades tip the scale in a for appraisals? A lot of sellers spend 50K or 60K upgrading their bathrooms and kitchen thinking they will recoup the cost with a higher sale price. Is that smart?
Appraisers are supposed to be licensed. I paid for an appraisal on a refinance only for tax purposes. The lender ordered it but said it would of been waived. loan to value 250k on a 650k home. The first thing that was strange is now the lender is holding up closing because of length of time for the appraisal? I paid 650.00 for the appraisal and there was several errors like missing a 3 car garage for a 2 car and a walk out basement. They only listed 3 comps one several miles away. There are 2500 homes in my HOA in hot market all less than a mile similar plans. I feel they compromised the job because they were rushed and it would have no impact on the loan being approved. What is my recourse?
Appraisers are legally required to be licensed.
Hmm, interesting that there were so many errors. All of those errors will have to be corrected before the loan is closed.
I would have taken the appraisal waiver on a refinance. You only need enough value to get the loan, it doesn't really matter after that what the value is.
Then, if you wanted an appraisal for tax purposes, I would have hired an independent appraiser.
had an appraiser come in today on my as is home,,,he was only here for 15 minutes,,,seemed way too short
theres a triplex that I want to buy but I know for a fact its not worth what they are asking should I still offer what they are asking and when the appraiser comes out and comes in low can I back out the deal or renegotiate the deal ?? I know ill loose my money on the appraiser but will it be worth it ? its a nice triplex but the guy who owns it bought it in 2018 for 365k he only put new windows into the property and now in 2020 only two years later he's selling it for 575k ! Im from California its a hot market where I'm at but the comps my realtor pulled up are not supporting the price
You can always renegotiate if the appraisal comes in low, but no guarantee the seller will be on board
@@WinTheHouseYouLove can't I ask my realtor to ask them if an appraiser comes low if they will come down before hand so I don't waste no ones time
I am currently in contract to buy my first home and my realtor put in my contract I pay whatever the appraisal is. So if it came back lower than the asking price I just pay the lower price.
Just watched another RE's video after viewing yours just now. Her's is also about 1 yr old. SHE states in her video, titled "if appraisal comes in lower...". My question is, she stated that some lenders will just add the appraisal cost and can be paid at closing. I understand lenders' may offer different choices.
But the one thing she says that caught my attention is that the appraisal cost will be credited back to the buyer at closing. You don't mention this in your video. Maybe it's an oversight or again maybe some lenders will do it this way. Your video makes it seem as the appraisal cost is money paid by the buyer out of pocket and that's final. Any clarification is appreciated. But these videos are over 1 yr old, so I understand if changes have occured. Really appreciate your content. peace, e.
It's not credited back. It's marked as paid outside of closing. I wouldn't suggest listening to a real estate agents advice on loans, they usually say incorrect things like that. I am a loan officer.
Example:
Your closing costs are $5,000 total.
Included in the $5,000 is an appraisal fee.
You pay $500 up-front for an appraisal.
You only have to pay $4,500 at closing since you already paid for the appraisal up-front.
In total, you paid $5,000 in closing costs.
@@WinTheHouseYouLove Seems she totally mis-spoke that then....twice. That's how bad info can get out there. Trying to find a local realtor that I can trust to tell me the real facts and not just embellish the story to excite me on a purchase. THanks for your reply.
Hey Kyle, I been watching your videos now a while now. I just needed some questions needed to be answered. I feel like am in a room with no air trying to breathe my own air. How can I contact you please? I needed help now coz the house am buying is closing in three days🤦🏾♀️
At the moment I can't do personal consults. I suggest talking with a loan officer you're working with
How does this work for a new construction and no sale happened as the houses are getting built and lot premiums are very different based on when you get in to a lot
Usually will be a cost approach appraisal
So I am refinancing my home and I am getting an appraisal. I recently did a patio in my backyard would that affect me if I didn't get with my HOA for the upgrade
I believe you need to an appraisal if you refinance and I believe home improvement should be documented. But, you can always ask your lender about this. Best of luck!
For a new home, we do not know the exact date of closing yet. It will be at least 6mo from now. My lender who has provided us the preapproval say that we have to pay the appraisal fee now t keep our loan application active. We have not finalized the final lender yet as we were planning to do loan shopping once close to our closing date in next 6mo. Is this a federal requirement to pay appraisal fee upfront to keep loan application active even if we do not have any idea of closing date. I would really appreciate your expert opinion. Thnak you
I just recorded a personal video reply for you: vid.us/kstsll
Selling my house now. Have offer 40k over asking but I have owned solar. Does that get included in appraisal? (Fully paid for)
It should be
@@WinTheHouseYouLove thank you, we just found out it is. Only as long as it’s paid off and owned (:
In case anyone else has this qiestion
Does the appraiser determine if the home Is a single family or
Multi family
Hey Terrance,
Great question! Typically, the appraiser doesn't determine if the home is a single or multi-family. Their job is identifying the value of the property. The type of property is usually identified by zoning codes and what is reported by the county auditor.
If you're thinking about pre-qualification, I'd love to help you get started at www.winthehouseyoulove.com.
I have a question. Is it better if the annual house appraisal comes in higher or lower? I'm talking about the annual appraised value report not when buying/selling a house? I can't seem to find an answer for this on the internet.
I'm unfamiliar with an annual appraised value report. Do you mean the assessed value for taxes? If you mean assessed value, lower is better because you pay taxes on the assessed value. Lower value = lower taxes.
Hi! Can you talk a bit about how the earnest money deposit works? Do you have to have it and what's the cost of it?
Oooh, that would be a great video topic! Added to my list :)
Hi how does an appraisal work if I’m not selling my home? I purchased with cash for $2000 and recently finished rehabbing. I’d like to get it appraised to pull out equity.
Great! It will work in a very similar way. The lender will order an appraisal and an appraiser will come out to your home to verify the value for the loan.
In some cases, you might get an appraisal waiver meaning an appraisal will not have to be done at all. Talk to your lender to see if that's an option :) Usually, the lender will need to run Freddie Mac's LP underwriting AUS instead of Fannie Mae's DO. They'll know what that means if you tell them
Win The House You Love Thank you for responding so quickly! This is incredibly helpful and your video is extremely informative!
@@iamjasmine2415 You're welcome! Thanks so much!
hello, what if appraisal has a lot of wrong information like, says it has fireplace, central ac, patio/deck, porch, washer/dryer, dishwasher, well water instead of city, and doesn't have any of that? seems like they are inflating/manipulating the price to match purchase price.
Wow! I suggest that you talk to your lender/ agent and have it appraised properly. Happy 4th July!
I can tell you what I do as an appraiser on getting an assignment. I read through the contract of sale looking for any special terms or conditions that would make the property more or less valuable. And I will comment on any items that are not standard to a contract. Items like furniture, cars, boats, a home based business or other intangibles such as a property associated with a vacation rental property such a linen, cookware, the web site and good will for a going concern business. These portable/chattel and intangibles and are to be excluded in the appraisal. The lender just wants the land and improvements valued.
Next I review the property's past sales history and comment on how the market has changed since the property was last purchased or over the last few purchases. Then I will look at the median for similar properties in the last 90 days and see how the current offer falls within the range of similar properties. I will also look at the last sale of a similar property that occurred on the street and how market prices have changed since that purchase. Then I will look at the Sales to Assessment Ratio (SAR) for all properties in the area and comment on the subject property and its assessed value relates to the SAR.
Only after doing all the above will I begin to select comparable sales in order to present a sample of the market that in my judgement captures the peculiarities of the property being appraised.
Then I will reconcile all of this information taken from the market place to formulate a market value range that the property falls within. If the offer on the property is within this adjusted value range I will most often conclude in the report that accepted offer is fair, equitable, reliable and reasonable for mortgage financing. If during my research I determine that the market for the property is weak or that I had difficulty in finding similar current sales I will make that comment to the lender as well and explain that the margin of error in the final estimate is greater than that of a typical property.
If the offer to purchase falls outside the range, I will revisit all of the above and dig deeper into the months of inventory, sales to new listing ratio and days-on-market. That information is usually needed to be conveyed to the lender in a very hot market with rapidly rising prices. Especially when properties are selling in a very short period of time and having multiple offers presented or the property is being marketed in a non typical manner such as a blind auction that is meant to entice multiple offers at the same time which could lead to a buyer over paying for the property.
Then it is up to the underwriter/lender to determine if the property meets their guidelines or if the asset backing the loan is too risky to take on without additional collateral or covenants from the applicant.
If you want to speak with the appraiser then the appraiser has to get permission from the lender to discuss the report with you. Any emails or telephone conversations will be included and retained in the appraiser's work file. Any exclusive sale information provided by an agent will go into the work file including the agents name and how much reliance the appraiser has made that this agent presented information is correct.
It's a litigious world out there. If I have to go to court to defend an appraisal I am going to be bringing others with me.
Wow! Your job is really an important part of home buying, thanks for sharing your views and information. :)
what app are you using on your IPad?
Adobe Fresco
Do appraisers know the price the buyers offer before hand? Our offer value happened to be right on the mark with appraiser value.
Yes. Appraiser's are given a copy of the home purchase contract.
Opinion ? There are rules and regulations for appraisers otherwise they could be subject to fraud …
I just bought a house and the mortgage company said they didn't need to do an appraisal I was all set for the financing
You say that the appraisal isn't an inspection, but then say that a major focus is on health and safety (including items that would need to be fixed before sale), which are code-related issues. That's not their purview. Appraisers aren't generally in a position to assess code violations. They're just supposed to estimate what price will be reflected in the market.
It's not an inspection from the viewpoint of a buyer. Health and safety are critical to underwriting the collateral value of a home. The appraiser doesn't care about code; however, each loan type has its own requirements for the condition of collateral they are willing to securitize. The price reflected in the market is significantly based on condition.
I have question concerning when you buying a house cash...... what is the process
I'll add it to my video list :)
Can a apraisal tax a semi truck?
What if you review the report and you noticed a statement on the report that is incorrect and it is a lie and you have proof to back up....what do you do? Am I allowed to contact the appraisal with my findings?
You sure can. Probably not a lie though, might be an honest error
Win The House You Love
I guess I should have used better words.. misuse of info;)
I will tell my story...The appraiser use MLS for Comps and I happen to know the system because I use to work for my brother who is a real estate broker and I currently work for a title company so I know how to search records.
The appraiser said he did not use the newest comp from June that are Comp #2 and #3 for comp#1 because they were NOT closed....option pending so they bared little weight in final reconciliation. The report was done 8/3 and Comp# 2 )$156,000and #3 $165,000 DID both closed in June per MLS and I pulled copies of the transfer Deeds showing recorded in June to the new homeowner. Comp # 1 listing closed 3/31 $141,000 so old Comp.
Appraisal value $145,000
This is my second appraisal because I switched lenders. The other appraiser got $165,000.
After I got the lower appraisal of $145,000 I called my brother to do Comps. I told my brother that my property is not going to go for $185,000-$200,000 like the updated properties...it does need work. He got $168,000...close to the first appraisal and 8 properties closed in July similar to my property.
I also found out from the security of state records that the appraisers company is co-owned by his wife that is a realtor in my area. My neighborhood is hot investors area...buying updating and selling. So I was wondering about disclosing....
Thank you for this video! i have a question. i almost got the house, but because of this crazy market time, we bid over the offer price about $25.000. after that, the seller agent asked my agent if we willing to pay if the home doesnt appraise? they said we have to pay the different price of this bid, $25.000. is it normal like that?
It's all negotiable, but the lender will not lend above the appraised value.
ua-cam.com/video/-vgGVKt6jBg/v-deo.html
If the appraisal is mainly for the lender. Why does the buyer have to pay for it? Seems to me they’d at LEAST pay half if nothing else.
Is this similar to land appraisals?
Hi! For land, it's called Land Survey.. it's different. :)