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“We are waiting on the appraisal to come back before we can close on the house.” Ever heard this statement? Maybe it came from your own mouth! But what exactly is an appraisal, and what does a real estate appraiser do during the appraisal? As always, we’ve got you covered.

What is a real estate appraisal?

A real estate appraisal is an opinion of value given by a real estate appraiser or appraisal company. It really is that simple. It may seem silly to hinge so much on one guy’s opinion-- what makes him so special? The opinion of value is more of an educated opinion from an expert in the field. You could say that an appraiser is more of a third party consultant hired by the buyer’s lender.

Why do I need a real estate appraisal?

When a buyer uses a lending company to take out a mortgage on a piece of property, the lender wants to make sure it’s an investment worth making. They’ll send in an appraiser to make sure the property is worth at least what the buyer is offering to pay for the house.

What does a real estate appraiser do?

We know that an inspector searches the house high and low for potential issues, but how does an appraiser ascertain the value of the home?

Compares Homes in the Area

One of the things an appraiser does is look at available appraisals of similar homes in the area. They’ll have several comps to refer to, and this is crucial to get right, especially if the appraiser isn’t local. Values can increase based on the street a home is on in a specific neighborhood. The appraisers must know the areas to look at when considering homes to compare to the one in question.

Considers Condition of the Home

Similar to the inspector, the appraiser takes a look at the condition of the home. They’ll make note of the wear on the roof, the holes in the walls, and the state of the property. While the appraiser most likely will not crawl under the house, they will consider the structural integrity of the property.

Looks at Repairs and Updates

The appraisal is where the updates you’ve made to the house come in question. Although not all repairs and updates are created equal, remodeling the kitchen and bathroom definitely adds value to the home. Keep in mind, however, that just because you dropped $5,000 on new kitchen appliances and countertops, it doesn’t mean that it adds the same amount of money onto the value of your home.

Some other updates and repairs that could factor into the price is a new roof, a finished basement, a mother-in-law apartment, and adding energy efficient HVAC systems.

Can I be there during the appraisal?

Many homeowners want to be at the appraisal to make sure the appraiser doesn’t catch anything. They want to be able to point out the newly renovated upstairs and explain improvements to the yard in comparison to other properties in the area. While this sounds like a good idea, you cannot be at the appraisal if you are working with a real estate agent.

You can educate your real estate agent on the value of the property, but the real estate agent is not required to attend the appraisal. If it is important that your real estate agent attend and plead your case, make sure to find the right real estate agent before you get to the appraisal.

What if I disagree with the appraisal?

It’s frustrating when your appraisal doesn’t come back reflecting the value you had hoped. If this happens to you, it is important that you obtain a copy of the report. Go over the report and be as nitpicky as you can. Look at all the homes they compared your house to, consider the neighborhoods and remodels. Look at the appraiser’s notes about the condition of the home, and make sure you run the calculations. It could be possible that the appraiser made a clerical error. If so, and you catch it, you might be able to make a case to your lender. If your lender agrees, they will send out an appraiser to run another appraisal and compare it to the first. Some lenders won’t put much stock in a seller’s opinion of the value of the home. That is why it’s important to gather as many comps and facts as you can to back up your claims.

Locating an agent that “gets you” is crucial to finding the home you love. That’s why you need Clever. Clever works with the best agents in your area which helps you locate “the one” a lot faster. Call us today at   1-833-2-CLEVER or fill out our online form to get started.


Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

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