Buyers and sellers all have stake in the appraisal process. Buyers will pay for it on behalf of their lender, usually costing them three to four-hundred dollars. Buyers want to know that the appraisal is accurate without accounting for inflation like bidding wars. Sellers probably want as much of that inflation included as possible because that means the raw value of their home goes up.
Appraisers have a fiduciary obligation to remain neutral and independent, so, with margin for people trying to finesse the system, we know they will give as accurate of a read as possible. Whichever side of the transaction you’re on, people usually want to know what’s getting checked. We’re going t go over it and hopefully ease your mind.
Timing
When a home is getting sold, the appraisal takes place when the offer is accepted. If someone is refinancing then it takes place before the approval.
The on-site appraisal usually ranges from twenty minutes to a few hours and includes taking photos, which sellers are sometimes uneasy about but the appraisers literally could care less if they wanted to put in the effort but it’s unlikely that they will.
After, the appraiser writes a report to the lender, and the whole process usually takes half a week.
The Basic Appraisal Process
The appraiser first does comparative analysis of a few properties in the area that are similar to the one in question. We call those compareables, aka “comps.” The appraiser then does the on-site appraisal conducted with loan-specific appraisal forms.
Conventional Loan Appraisal Checklist
The appraiser will check the following for conventional loans:
- Condition of the home, appliances, amenities like pools, sprinklers
- Size of the property
- Quality of landscape, roof, foundation, lighting, plumbing, basement
- Amount of rooms, fireplaces, windows
- Details such as granite countertops, hardwood floors, and appliances
- Upgrades and remodeling
"Subject to Flags"
Subject to flag means there is something about the home that has to get inspected or fixed before a loan gets approved.
When these show up, it’s usually due to actual damage or the appraiser wanted a second opinion.
- Evidence of damage from termites, mold, or foundational problems
- Un-permitted additions
- Roof damage
- Electrical or plumbing issues
- Environmental detriments
HUD Appraisal Checklist
If you’re using an FHA or USDA loan, appraisers have to check for additional things per order of the HUD, like:
- Proper water drainage
- Stair railings
- Ventilation
- A roof that’s good for at least two years from the sale date
- Lead-based or defective paint
- Sidewalk/driveway damage
VA Appraisal Checklist
- appraiser licensed by VA.
- VA selects appraiser
- appraisal reviewed by VA appraiser or lender’s SAR.
- reviewer issues notice of value post-review process.
- The NOV indicates home’s value and lists any flags
VA appraisers check for:
- Heating
- Roofing
- Septic
- Water
- foundation
- utilities
- pest inspection
- paint
- staircase handrails
- windows
- wood
- Water damage
- electric
How you might use the above info
Whether you’re buying or selling, we hope that will help you have a rough idea of what that appraiser is going to do in your new home. Seller’s can improve on those areas pre-appraisal to up the value of their home, while buyers might know what to look for when they’re searching for a home.
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