What do they look for in home appraisals? What is a home appraisal? - YouTube

Hey are you wondering, "what do they look for in a home appraisal?"

"what exactly is a home appraisal?" "what hurts a home appraisal?" or " what are

some home appraisal tips for sellers?" well, that's what I'm going to talk to

you guys about today so stay tuned! Hi, my name is Mary Schumann. I'm a realtor in

Minneapolis Minnesota and every week I post videos about all things real estate

and living in the Twin Cities so stay with me because today we're going to

talk about home appraisals, what do they look for in a home appraisal and what

hurts a home appraisal! There are really only three things

that they look for in a home appraisal and those things not small. Location

of the home, condition of the home, and what similar properties are selling for

nearby. So the only thing that you, as a seller, can control is the condition of

your home. What is a home appraisal? Your Realtor or the sellers realtor is

going to do something called a "comparative market analysis" what this

does is give you a range of prices for properties that are similar to yours

that have sold recently in the area. If you're a seller this is going to help

you set the price of your home and if you're a buyer what this is going to do is

help you kind of decide what maybe you want to offer on a home. Appraisal

differs from a comparative market analysis in that it's the actual value

that the bank puts on the home. There's no wiggle room here, this is

important because the bank won't loan one penny more than the appraised value

of the home and the reason that they do this is that this property is now

collateral on the loan that you've taken out to purchase it. So if for some reason

the property should go into foreclosure this is what the bank will be selling to

recoup their loss. For a bank it's probably more advantageous to be a

little bit conservative in placing their value

than aggressive. Who pays for the appraisal? Well, that would be the buyer

of the property and even though they're paying for it they are NOT the client of

the appraiser. You have to keep in mind that the appraiser works for the

bank. He or she is trying to ascertain an actual value for the bank

and determine how much they can loan on the property. How much does an appraisal

cost? Well, it costs between three and five hundred dollars. This really isn't

an out-of-pocket, upfront, cost this is something that you're going to settle at

the closing table. You might not think an appraisal can be exciting but there

are a couple of situations that it can be! Say you're a buyer and the

appraisal comes in higher than the price is that you've agreed to pay for

that property? Instant equity! If you're having an appraisal to get PMI

removed from your loan, for example you bought a property and you weren't able

to put 20% down and PMI private mortgage insurance was tacked on to your monthly

mortgage bill and you want that removed. If you think that your property has

increased in value or you've paid down enough of the loan you can have an

appraisal done on the property to determine whether or not you can get out

from under PMI. If that appraisal comes in at the right price you could be

saving yourself one hundred bucks a month on PMI insurance! If you're a

seller an appraisal can be really exciting in a bad way if the appraisal

comes in lower than the agreed-upon price that you've reached with the buyer.

Now the bank won't loan the amount that you've agreed upon and what now ? If

you're the buyer, you have a few choices. One, if there was an appraisal

contingency in your contract you've just been protected from spending

too much on a home and you can walk away from that contract

assuming that the contingency is in place. Or, you can negotiate a new price

with the seller to make up the difference between the appraised value

and the agreed-upon price. Lastly, your option is coming up with the extra

cash to make up the difference between the appraised price and the price that

you've agreed to pay. So if you really want the property you can still buy it

you just can't get a loan for that full amount. If you are a seller and you

think that the appraisal is wrong what you can do is challenge that appraisal

and pay for a new one. Home appraisal tips for sellers! Number one, accompany

the appraiser as they walk through the property you should point out and make a

list of any improvements that you've made .New furnace, new or updated

windows? Point it out! If you're on a desirable location, like a cul-de-sac and

you're in a really family heavy area you might want to point that out too.

You should let the appraiser know if there are comparable sold properties in

the area so they can look at favorable comps for you.

Correct any public records. If you've got more finished square feet than the

public records show and you have documentation, you'll want to let your

appraiser know that because that does affect value. If you have other offers on

the property make sure you let the appraiser know because this is a good

indication of what people are willing to pay for a property like yours. I hope

this video has helped you understand what they look for in a home appraisal,

what is a home appraisal, what hurts a home appraisal, and some home appraisal tips

for sellers.

If this video helps you out and you enjoyed watching it please go ahead and

hit the subscribe button and then hit the little bell so that you get

notified every time I post a new video. Thanks for stopping by and I'll see you

next week!