Buying or selling a house is never an easy process. There’s always something that gets in the way, and it seems to take forever! As Keyrenter Hampton Roads explains, if you are buying a house and you are looking for a mortgage, there is no doubt the lender will want a full and accurate appraisal of the property. If you are selling, you may want an appraisal to see where you can make improvements and add value.
If you want an example of typical businesses offering Real Estate Appraisals in Markham, that link takes you to one of the leading names in the region. So, what is a property appraisal? What is involved, and what does an appraiser look for? We will try and answer all these questions in the following article that covers all things to do with property appraisals. Let’s start by explaining what a property appraisal is.
What is a Property Appraisal?
A property appraisal is an accurate assessment of the value of a property at the time it is inspected. It is usually requested by a lender who wants to make sure their money is going towards a property of that value. Let’s say you are a buyer, and you make an offer of $450,000 on a property valued at $470,000, and the vendor accepts it.
Now your mortgage company will ask for an appraisal. We’ll look in a little more detail at the areas examined when appraising a property. If the appraisal matches or exceeds the amount to be lent, the lender will proceed with the deal. Let’s say, however, this appraisal comes back at just $420,000. There are now two options: the vendor lowers their price to meet this, or you – the buyer – need to develop the extra funds to meet the difference.
Put simply, then, the appraisal value is the most the lender will put forward on the property. Let’s now look at what is assessed in an appraisal.
What Is Involved?
The following are what a property appraiser looks for in determining the value of a property:
- The home’s overall condition is assessed in terms of whether or not it is structurally sound, whether there are areas of damage that will need repairing, and other general factors such as leaking faucets, broken windows or doors, missing door handles, and minor items such as these.
- The location of the property will influence the value to a great degree. A house on a busy road, for example, will be worth less than one on a quiet street. They will also assess the general area, the proximity to amenities such as good schools, the state, the condition of neighboring homes, and other influential factors.
- Renovations – especially to the bathrooms and kitchen – will add to the value of a home as they are more attractive to buyers, as will any additional extensions or other notable improvements made to the property.
- The age of the property is an influencing factor. An older home is not necessarily worthless, but some will be marked down compared to newer properties because of their age.
- The exterior condition of the building will also be assessed, taking into account the quality and state of the roof, brickwork, windows, doors, and outhouses, and other external features.
- An older design – one no longer in vogue – will reduce the value considerably as it is a less popular house.
- Water damage will be a problem and is one of the first things an appraiser will look for. They will check for signs of leaks, flood, mold, and any possible signs of water ingress.
- The overall size of the home will have an impact on the value. This will be measured in terms of the number of bedrooms and bathrooms, living space, kitchen, and so on. A larger property will naturally fetch a higher price than a smaller one.
- The interior in terms of the fixtures and fittings, general décor, and many other factors will also be considered. The best-selling houses present a blank canvas for the new owner to make their own.
- Infestations of bugs or other animals will be instantly noticeable to an appraiser and will need to be dealt with before sale.
- Safety features such as smoke alarms, security alarms, handrails on staircases, and fire equipment are expected on homes these days.
As you can see from the above, there are many factors that we perhaps don’t think about when considering property values, and these are what an appraiser is trained to look for. Using the above as a checklist when viewing properties will give you a head start when choosing the right one.
How Do I Choose an Appraiser?
If you are getting a loan from a mortgage company, they will more than likely have an independent appraiser that they use. If this is not satisfactory to you, you may get in touch with a local real estate agent and ask them for a recommendation or check out local home appraisal service providers. These people will know the local area comprehensively and will be able to give an appraisal based on local knowledge and the value of the property. This gives them an advantage in providing an accurate and – for the lender – acceptable value for the property.
An appraisal is a requirement with most mortgage lenders, but it’s also something you might want to have done if you are thinking of selling. An appraisal produces a detailed report that will show you where improvements need to be made that will add to the property’s value. As the above list confirms, even minor points such as missing fittings can affect your property value, and many of the factors do not cost a lot to rectify.