PREPARING FOR AN APPRAISAL
Ok, You have just signed a mound of the paperwork for your refinance/purchase. You handed the loan officer the check for the appraisal, and now you are wondering what will happen next. Great news, while some people will tell you otherwise - the appraisal observation/inspection is truly painless. The physical observation/inspection usually takes anywhere from 30 -90 minutes to complete. However, there are a few things that you should do to help the process move along as smoothly as possible.
PREPARING FOR THE APPRAISAL OBSERVATION/INSPECTION
Create a list of items that is unique about the subject property for the appraiser and include some of the following items:
- Information about any improvement/s.
- The cost of the improvement/s.
- Some before and after pictures if available.
- Make sure each room of the property is accessible, The appraiser is required to inspect and take pictures of each room.
- If there are an attic and a crawl space, these areas will also have to be accessible for observation/inspection. The appraiser is required to take pictures of these areas.
- Give the appraiser room to do their job.
- Keep all pets contained.
- If you live in a development/subdivision/condo, etc., or other that has a homeowners association, have the name and phone numbers of the contact person available, along with a fee statement.
- Walkthrough each room and straighten up as if you were getting ready for company to visit.
- Have a copy of any agreements regarding easements (shared driveways and garages, etc.) or leases.
Appraisers are objective and can look past many things. However, photos will be taken, and the underwriter reviewing them may feel differently. Complete any unfinished projects. Most appraisal reports are completed in the "as is" condition. The appraiser will adjust incomplete projects in the appraisal report, and in some cases, the appraisal will be made "Subject to Completion." The "Subject to Completion" may mean that you will have to complete the project, and a final inspection will be ordered by the lender before the loan transactions can continue.
CONCERNS ABOUT CURRENT VALUE
I am a big proponent of developing a relationship with a realtor. Specifically, one that does work in your neighborhood. They are professionals who do this all the time, and they do it well. They can help you understand what is happening in your area and your market at the time of your appraisal. This is so there is an understanding of what is going on in your current real estate market at the appraisal observation/inspection time.
ONCE THE APPRAISAL IS COMPLETE
You have a right to a copy of your appraisal, so ask for it. A copy of the appraisal report is typically given to the homeowner from the lender after closing. If you should find any errors or have any questions, talk with the lender about the appraisal. You may not know who to talk to about mistakes or who to ask questions. You paid for the appraisal, but the lender requiring the report is not the appraiser's client. The appraiser can only discuss the report with their client which in most cases is an AMC (Appraisal Management Company). So direct any questions or concerns you may have to the entity requiring the appraisal (mortgage company, attorney, government agency, etc.).
