Valley Sun Appraisals

A: Caveat, these are suggestions and are not a guarantee of any kind. What increases a home's value is always market specific. For example, having a pool in a retirement community might not add as much value, or may even be a negative factor, vs. in a neighborhood of mostly families. The following suggestions are things that work in most market area's given the right market conditions and are some of the most cost-effective things that can be done, i.e., the most bang for your buck; Paint the interior; New flooring; Update kitchen with new countertops and appliances; Update bathrooms with new vanities and fixtures; Install new fixtures (ceiling fans, lighting etc.).

A: Yes. At the inspection the Appraiser is gathering data, so it's a good idea to let them focus on that, so they do not miss something or make a mistake in their measurements. I would suggest writing down all upgrades or any special features that you want them to know about ahead of the inspection with the year the work was done next to each item. Give this to the Appraiser at the beginning of the inspection. This is particularly important for any items which might not be readily visible such as a new A/C unit, water heater, or roof. Try to avoid discussions of value, at this stage the Appraiser has probably not developed his/her report and does not know. Also, whoever orders the appraisal, is the Appraisers Client. An appraiser has confidentiality with their Client, which means they may not be able to discuss value with you even if they had one. Just because you are paying for the Appraisal does not mean you are the Client, this is a common misconception. An example of this would be a refinance appraisal. The Lender typically orders the appraisal and is the Client.

A: Home Inspectors and Appraisers sure seem a lot alike, and you wouldn't be alone if you mistook one for the other! They both perform an inspection of your home and they both produce a report that evaluates your home. So, what's the difference? One simple way to differentiate the two is to think about it this way: the home inspector will evaluate your home from the surface inward, while the appraiser will evaluate your home from the surface outward, including the neighborhood and surrounding market. An Appraiser will observe the structure of your home and its systems, and in some cases may operate some systems, but will generally not disturb anything to do so. Unless there is an obvious issue, the Appraiser assumes in many cases that the structure and systems are serviceable similarly to other homes sold recently in the local market area. Meanwhile, the Inspector may take a deeper dive into certain structures and systems to look "under the covers" to determine how serviceable they are and whether a home buyer can expect them to last a reasonable amount of time, or should request the seller to repair, or factor repair into the sales transaction. An Appraiser may note repairs needed when they are apparent from basic observation. The Home Inspector will typically have more expertise in these structures and systems but will generally not have the expertise to evaluate the effect on the overall value of the home. A Home Inspector can give the buyer an assessment of their risk of repairs needed, while the Appraiser gives the Lender an assessment of their risk of lending on the home for mortgage-backed sale transactions. For non-mortgage situations, such as cash sales, estate settlements, divorce settlements, tax assessments, and others, the Appraiser helps all parties involved understand the value of the home, where the definition of value fits the specific situation. Your specific situation will determine whether you need both a home inspection and an appraisal or one or the other.

A: There are many questions with home appraisals where the answer is, "It depends!" And this is one of them. If a home is being sold and the buyer is financing a portion of the purchase price, or a home is being refinanced, the lender will make the determination whether an appraisal is required based on their risk assessment, which will include the financing terms the borrower is requesting (e.g. amount of down payment, total loan amount, loan term, etc.), the characteristics of the home (age, size, quality, condition, location, etc.) and the current state of the overall market. If the Lender determines the risk is below their threshold, they may waive the appraisal; if above, an appraisal will be ordered by the Lender. For non-lending situations, such as a cash financed sale, estate settlement, divorce settlement, real estate investment and tax situations, an appraisal may or may not be necessary but significantly improves the likelihood that the parties involved will have confidence in the value. If an attorney or other expert on the matter is involved, they can often provide guidance on whether an appraisal is needed. In some cases, multiple appraisals may be ordered to further improve the level of confidence. Another opportunity to leverage an appraisal is sometimes referred to as a "pre-listing" appraisal. These appraisals are often used for complex and/or unique properties prior to putting them on the market to improve the likelihood of getting the best value for the property and minimizing the chances that the property sits on the market for an extended period.

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