What do appraisers look for in your home?

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An appraisal report usually involves a description of the property, details about its location, an analysis of use, a review of nearby similar properties, and, finally, information regarding local real estate trends. The appraiser is a neutral party whose sole purpose to provide an unbiased opinion of the market value of your home whether or not it is a if it’s a purchase or refinance. The appraisal is primarily used to make sure that neither the buyer nor the lender is about to enter into a questionable financial agreement.

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Neighborhood Attributes

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Let’s begin with a big-picture overview.

Type of Neighborhood: Is the home in an urban, suburban, or rural location?

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Neighborhood Growth:  Is the area growing in size? Is there steady demand for homes? Are property values for your particular home, ranch, two story, bi-level increasing, declining, or stable?

Neighborhood Land Use: An appraiser evaluates how the property is being used. What is the properties Highest and Best Use

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What is Highest and Best Use: A simple definition of highest and best use is the most reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are; 

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• Legal Permissibility
• Physical Possibility
• Financial Feasibility
• Maximum Productivity

Be it residential or commercial, and whether it’s a single- or multi-use unit (for example, is there a retail space on the ground floor and an apartment above? Is the building a mix of office and residential units?)

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Housing trends. In short, what’s going on in the area? Appraisers will take note of whether residents are renting, buying, renovating, what types of new properties are being built, and so on.

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The Home Attributes (Listed below are some of the most important things that the appraiser looks at; 

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• Type of House: This can refer to a single-family home, a townhouse, a unit in a condominium complex, a mixed-use space, or something else entirely.

• Design and Style: An appraiser will consider the architectural style of the home. Think modern, ranch, craftsman, colonial, mid-century, and so on.

• Build Year: The age of a home can influence value, particularly if it’s newly constructed or historic.

• Construction Materials: Here’s where the appraiser notes everything from siding (brick, vinyl, concrete, composite…) to flooring (hardwood, tile, carpet, laminate…), to trim and wainscoting (wood, plastic, metal…).

• Square Footage: How large is the home? The appraiser is required to measure your home. This is one of the most important factors in determining the value of your home.

• Number of Bedrooms: These will be counted in accordance with state regulations on what defines a bedroom. Any bedroom located below grade is considered a finished basement area and is given credit in a different section of the appraisal grid. 

• Number of Bathrooms: Full baths and half baths both earn credit. Also, any bedroom located below grade is considered a finished basement area and is given credit in a different section of the appraisal grid.

• Foundation Type: Appraisers look at whether a home is on a slab, has a crawl space, or has a full basement.

• Basement Details: If the home does have a basement, an appraiser will take into account whether the space is finished, if are there any foundation cracks, or if the basement takes on water.

• Attic Details: If the home has an attic, the appraiser will evaluate the size and condition of the space. When doing FHA appraisals, the appraiser is required to do what is called the “Head and Shoulders” test. The appraiser is required to inspect the attic and basement/crawl space to at least the head and shoulders level.

• HVAC Details: How is the home heated and cooled? How old is the system? What condition is the system currently in?

• Check the Panel Box: The appraiser will check for the following defective conditions during an electrical panel inspection:

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Do I have an escape path? Make sure that you know where you can safely turn or step if you must safely escape a dangerous surprise, such as bees or sparks. An unfortunately placed shovel or extension cord, for instance, can turn a quick jerk into a dangerous fall.

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Are the Floors Wet?: Never touch any electrical equipment while standing on a wet surface!

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Does the Panel Box Appear to be Wet?: Check overhead for dripping water that has condensed on a cold water pipe. Moisture can arrive in more ways than you can imagine.

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 Is the Box Rusty?: Rust is an indication of previous wet conditions that may still exist.

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 Is the Panel Cover on the Box?: This may or may not be an issue. If the cover is off the box the appraiser should inquire to the agent/ homeowner as to why.

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 Car Storage: This refers to proper parking areas, not how many vehicles could theoretically fit on the front lawn. Garages (attached or detached),  carports, and driveway will be evaluated — as well as the driveway surface type  (pavement, gravel, dirt, and so on).

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 Appliances: An appraiser will take note of present appliances, which may include:  a refrigerator, stove, oven, dishwasher, microwave, washer and dryer, and others. The appraiser should inquire to the agent/ homeowner as to the age of those appliances. The list below is the age life of some of the components of your home.

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Furnace, Heaters, Ventilators, and Air Conditioners (HVAC): Furnaces on average last 15-20 years, heat pumps 16 years, and air conditioning units 10-15 years.

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Faucets and Fixtures: Kitchen sinks made of modified acrylic will last  50 years, while kitchen faucets will work properly for about 15 years. The average life of bathroom shower enclosures is 50 years. Showerheads last a  lifetime, while shower doors will last about 20 years. Bath cabinets and toilets have an unlimited lifespan, but the components inside the toilet tank do require some maintenance. Whirlpool tubs will function properly for 20 to 50 years,  depending on use.

• Windows and Skylights: Aluminum windows are expected to last between 15 and 20 years while wooden windows should last upwards of 25 years.

• Roofs Lifespan by Type: The life of a roof depends on local weather conditions, proper building and design, material quality, and adequate maintenance. Slate, copper, and clay/concrete roofs have the longest life expectancy—over 50 years. Roofs made of asphalt shingles last for about 20 years while roofs made of fiber cement shingles have a life expectancy of about 25 years, and roofs made of wood shakes can be expected to last for about 30 years.

Features and Amenities: What “extras” does the home have? This is where the appraiser looks for things like fireplaces, outdoor spaces (porches, patios, balconies), fences, pools, extensive landscaping, detached buildings for storage or workspace, and more.