First American Mortgage Solutions

Appraisals 101: What to Expect.

On the surface, it may seem like an appraisal is a simple, fast process. An appraiser shows up at your house for a short time, takes some photos, notes and measurements, and that’s it. However, the home visit is only a part of the appraisal process. In fact, a typical appraisal report requires 12 to 13 combined hours by appraiser and staff to complete. At First American Staff Appraisals, we follow thoughtful and thorough procedures to provide a complete and accurate appraisal

PRELIMINARY INFORMATION GATHERING

The appraisal process usually begins with a telephone or in-person interview with you about your home as well as thorough preliminary research of recent home sales and listings in your neighborhood. In the language of appraisal, these sales and listings are referred to as ‘comps’, which is short for comparable properties.

IDENTIFYING UNIQUE CHARACTERISTICS

If the appraiser is aware in advance of any unique elements of your home, such as a finished basement or design by a historically significant architect, additional research will be done on the front end to find comparable homes exhibiting the same or similar characteristics, regardless of how far away those comparable homes may be. Our appraiser makes dollar adjustments to reflect differences in comp properties. Upgrades like fireplaces, air conditioners, recent redecorating, or home improvements can add value to a property.

THE HOME VISIT

Then the appraiser conducts a careful physical inspection of your home. Don’t worry about the kids, toys or household disorder. We are looking at the structure, condition and features of your home.

SELECTING THE COMPS

Having made a sketch of your home, computed its size and noted its most significant characteristics the appraiser now can select an appropriate selection of comps from the data already collected. If during the inspection the appraiser learns of something that would affect the value of your home, a return visit to the office for more research may be in order.

VERIFYING THE COMPS

You may see our appraiser driving up and down the streets of your neighborhood. We will be searching your neighborhood for homes that are similar to yours in location, size, design, number of rooms and extra features. Our appraiser drives by all possible comps for the purpose of exterior inspection, making notes on condition and location and photographing them. Returning to the office, phone calls will be made to agents and other parties involved in these transactions to confirm observations or to gather further information about the properties and/or financial aspects of the transactions. Often, property information from several sources is in conflict and it is the appraiser’s task to determine the true state of affairs by means of research, experience and good judgment.

PULLING IT ALL TOGETHER

Next, the appraiser performs in depth analysis of all of the available data and then prepares a detailed report with several addenda including copies of parcel and neighborhood maps as well as photographs of your home and the best comps available. There will be at least three comps, but generally four or five are necessary to support the basis for the final appraised value.  Your lender may also have specific guidelines that must be followed.

  • Every effort is made to substantiate the appraiser’s opinion of market value.
  • The value conclusion is not based in any way on the personal or architectural preferences of the appraiser.
  • It is always a carefully reasoned value based on recent real estate activity of properties similar to yours. If homes like yours are selling at good values, you should have a relatively high-appraised value. If not, the market is saying something else to you.

The completed appraisal is packaged and transmitted to our client—the lender or lender’s representative who ordered the appraisal.  When you are provided with a copy of the appraisal, we highly recommend that you read it thoroughly.  If you have questions or concerns about the appraisal, you should contact your lender and not First American Staff Appraisals directly.  Your lender will have processes in place which they are required by law to follow, for addressing your questions or concerns.

QUALITY CONTROL AND REVIEW PROCESS

During its life, which is typically three months, the appraisal report may be subjected to thorough review and examination by any one of several lenders and their staff reviewers. The purpose of the reviewer may be to uncover inflated appraised values presented for the purpose of obtaining what in their view would be dangerously high loan amounts.

  • For this period of time, your First American Staff appraiser may have to answer inquiries from several lenders about any aspect of the report. These answers may be by telephone but are usually required in writing and can be quite extensive and time consuming. But they are a necessity in the process of ensuring a truly accurate final appraisal report.
  • A concerned and well-informed appraiser can often be the difference between a perfectly good loan being granted or denied.
  • First American Staff Appraisals prides itself on its professionalism and commitment to customer service.  The time spent fielding these requests during the loan process is as much a part and cost of doing business as the appraisal itself.

Our appraisers are friendly, courteous and interested in providing any information you may need. Ethically, we have a client relationship with your lender or lender’s representative. All of our communication must go through our clients. However, feel free to ask questions while we are in your home.  Please note that any conversations that appear to influence value may be required to be reported to your lender.