What Do Appraisers Do? - YouTube

there are tons of misconceptions about appraisers  and what they look for when determining a home's  

value i'm here to clear that up for you  in this episode of real estate unlocked  

hi i'm melissa spittel the local real estate  expert in carroll county and the surrounding  

areas of maryland let's talk about the role  of appraisers when a house is being sold  

when a buyer is getting a loan to buy a house  the lender will require an appraisal to be done  

after going under contract and officially applying  for a loan the appraisal will be ordered buyers  

pay for this upfront it's not included in the  closing costs the appraiser becomes the eyes  

and ears for the lender because no one from  the bank ever goes to see the house in person  

neither the buyer nor the lender picks who the  actual appraiser will be to keep things fair the  

appraiser is always an independent third party  it's someone who is required to remain neutral  

after an appraiser is assigned to the house he  or she will make an appointment to go see the  

house in person in order to remain neutral they  don't want a lot of people there either sometimes  

the homeowner is there to let the appraiser  in sometimes the listing agent will meet the  

appraiser there just in case the appraiser has any  questions about the property the buyers and their  

buyers agent do not attend the appraiser will then  write up the official report and submit it to the  

lender for review and approval appraisers do two  things when they report back to the lender first  

they provide what they determine the house is  worth and second they look for any physical things  

about the property that could cause the loan to be  denied now most people are surprised to know that  

yes there are things about a house that can cause  a problem for the loan there are three particular  

types of loans that are shall we say picky about  the condition of houses these three types of loans  

are the usda va and fha loans what kind of things  can cause a loan to be denied some of the most  

common things include a house that does not have  a stove a staircase that doesn't have a railing  

broken windows peeling paint in a house that  was built before 1978 a roof that's in bad shape  

outdated or missing smoke detectors and any other  factors that an appraiser determines are a health  

or safety issue an appraiser calls these things  lender required repairs this means anything on the  

list will need to be corrected by the seller in  order for the loan to be approved in other words  

the lender will require that repairs be made the  buyer is not allowed to fix any of these things  

so if the house is being sold as is there's  always that chance the repairs will not be made  

and the buyer will either have to switch to  a different type of loan if they're able to  

or not buy the house if the seller is willing  to have any repairs done the appraiser will go  

back out to the house after the repairs have been  completed to verify and report back to the lender  

an appraiser will also determine what the house  is worth lenders want to know so they don't  

issue a loan for more than it's actually worth  they will approve a loan for up to the amount  

a house appraises for and not a penny more how do  appraisers determine what a house is worth though  

appraisers consider the recent comparable  home sales in the nearby area this is the  

most important factor in their evaluation they  look at the houses that have already sold not the  

houses that are for sale or under contract then  they compare those houses to the one they are  

appraising now many people are surprised to learn  the things that appraisers do and don't take into  

consideration they do not care about the decor  designer window treatments or expensive drapes  

but they do examine the health  of the exterior structure and  

roof they do not care about paint color  they see everything in black and white  

appraisers do care about room additions or major  add-ons these things can increase living space and  

add additional value but they don't care about the  pool table that's being left in the house for the  

buyer or expensive art or furniture they do factor  in an in-ground pool when doing their calculations  

they probably won't give it a value equal to  what it costs to have it installed however  

they also will provide additional value if  they're out buildings like a shed or barn  

does the house have a deck a patio or both  they add value but if there's a hot tub there  

too it doesn't count hot tubs provide zero  value another thing that can help give the  

appraisal a boost is parking a two-car garage is  worth more than a one-car garage or no garage at  

all appraisers do consider proximity to major  traffic streets and it can hurt a home's value  

it's good to be able to access these for a commute  but noise and congestion levels versus other homes  

in the neighborhood does matter an appraiser will  generally deduct value for a house located on a  

busy major route of travel ultimately they  don't care what you think a house is worth  

they care about the facts and what similar  homes have sold for in recent months  

that's the bottom line if you found this video  helpful here's another one you might enjoy as well  

if you're thinking about selling your house it's  important to price it right so it appraises the  

best way to do that is to contact the local real  estate expert who can find the best comparables  

for your house click the link in the first  comment below this video to get started  

you can also find it down there in the  description box and if buying a house is  

in your future you can fill out that contact form  too it's never too early to put a plan in place