Frequently Asked Questions
What is an Appraisal?
An appraisal is requested by a lender to figure out an estimate of the fair market value of your home. This helps ensure that the amount of money borrowed is appropriate. Also included in an appraisal can be; the current condition of your property, sales information for similar properties, and the location of the property.
What do I do if I think my appraisal value is too low?
If you are concerned with a low appraisal don’t worry, there are several solutions available. For one, the lender will make a loan based on the ratio agreed to in the contract at the appraised value. Other options include; lowering the price of the home, the seller offering to carry a second mortgage to lower the price, ordering a second appraisal, a compromise on the value, or in the worst case, canceling the transaction.
What does an FHA appraiser look for?
The appraisal process for an FHA appraiser tends to focus on the following areas: the roof, the foundation, lot grade, ventilation, mechanical systems, heating, electricity, and crawl spaces. In these areas, appraisers look for any health and safety concerns for you, the home buyer. For example, any signs of damaged and lead-based paint, a sufficient heating and cooling system, a durable roof, and other signs that show the home is free of all known hazards.
What is the difference between an Inspection and An Appraisal?
While an appraisal and a home inspection may sound similar at first, they are actually both quite different. An appraisal does the job of informing a lender about the updated value of the property. In contrast, an inspection helps educate you, the buyer, about the current condition of the home and any future problems that may occur.
How do I communicate with an Appraiser?
You should feel completely comfortable keeping communication with your appraiser. While it has been said in the past that trying to talk with your appraiser can lead into legal trouble, it is actually encouraged to keep contact with them as long as you are not trying to influence the outcome of the appraisal.
How does an appraiser measure properties?
Using ANSI (American National Standards Institue) guidelines, appraisers begin their measurement with the outside of the property. During this process, they will use both a tape and a laser measure. If there is a second floor on the house, the appraiser will begin measuring the interior walls and add 6 inches to account for the exterior walls. To be accounted in the GLA (Gross Living Area) your ceilings must be at least 7 feet and any sloped ceilings must be at least five. Also, any garages, basements, or other unfinished areas will also not be counted in the GLA. After the measurement is complete, make sure you sit down with you appraiser and the official tax record of the home, so they can explain any differences between the two.