Appraisal? What's An Appraisal?

Let's face it, buying and selling a home has a language of its own! So just what is an appraisal? Isn't it the same as the assessed value of a home?

No. The assessment is the value the city or town puts on a property. It's somewhat arbitrary, based on factors including the municipality's budget - how much revenue it needs to take in. An appraised value is what a mortgage lender thinks a property is worth. It will almost never be the same value as the assessment!

Whether you're buying or selling, you want the home to be worth the highest amount. As a seller you want to receive top dollar for your home, and as a buyer you want to know that you're getting a good value. Appraisers don't just walk in the front door and immediately know what the value is - there are many factors and much time that go into an appraisal. 

First, a home appraiser will pull comparable listings from the nearby area, in general these properties need to be within 1 mile of the property being appraised. These are homes similar in style, location, and square footage sold within the past few months. The appraiser will come to the house to determine its condition and quality, as well as any other factors that would affect the cost of the home, and use that information — along with the comps — to make an accurate assessment. The appraiser must look at every room, the electrical panel, the interior and exterior of the home and the yard, and will draw a rough sketch of the rooms. Next, the appraiser will take several hours (an appraiser usually has 5 business days to turn in an appraisal report) to compare all the information and photos with the comps.

Prepping for the appraisal is important. Not only will the listing agent meet the appraiser with comps in hand, and personal insight into the comps, but the agent should also have a list of any updates and improvements done to the home that might increase its value. Things like a newer roof and heating system definitely will lead to a higher value than a property with a leaky roof and 30 year old furnace. 

If you're the seller you will want your home to be in show-ready condition. While the appraiser isn't going to judge you on your housekeeping skills, it's always best to show your home in its best light. A neat and clean home helps to show that you've maintained your property. It is also best if all occupants of the home make themselves scarce - and take pets with them!