The Appraisal Home Inspection
Who is this Guy & What is He Doing in My Home..?
“Hello. I am the real estate appraiser and I am here for the inspection of your property.”
An important aspect of the residential appraisal process is the full interior/exterior inspection. The appraiser is expected to take a look at several features related to the “Subject Property” (a.k.a – Your Home) to properly select similar sales, also referred to as Sales Comparables, as well as complete the first page of the appraisal report. This post is a brief outline of what the inspection process is, what to expect as a homeowner, and what an inspection by an appraiser is not.
What is the Home Inspection, Short Answer:
From an appraisal standpoint, the inspection is a brief, topical assessment of your home to identify key features that are part of the property. This may include the number and condition of bedrooms, bathrooms, type of HVAC system, type/condition of interior finish, flooring type/condition, wall type/condition, foundation type/condition, number of garage spaces, patios, etc. Like buying a car, you can see what it has to offer on paper until the cows come home, but until you actually see it, it is difficult to fully comprehend.
What is the Home Inspection, Detailed Answer:
The inspection process can merely begin with an address, but when it’s all over and done with, the appraiser typically has compiled a workfile full of pertinent information regarding the subject property, the subject’s immediate neighborhood (known as a subdivision or subarea) and the larger MLS marketing area. Once locating the address, the appraiser immediately begins to start gathering data that will help clarify the marketing area, the neighborhood and any/all general data related to the subject’s parcel of land and all the improvements (home, garage, outbuildings etc…) that are affixed to the land. As the appraiser is driving to the subject property, constant notes are likely being taken about the neighborhood boundaries, busy streets that form the neighborhood, external factors affecting the neighborhood and the location of the subject’s parcel of land within the neighborhood. All of this data is typically gathered before the appraiser even puts the car in “Park.”
As the appraiser is getting out of the car and walking up to your home he/she will be noting the features of your home and tracking them in the workfile. As an appraiser, you can never gather too much information about the subject property…Never. You may see them take up to 100 pictures, most which will not make it into the appraisal report itself. In this case, the extra pictures would stay in the work file until requested by the client.
Appraiser Tools
Most appraisers carry at a minimum three very important tools needed to complete the full inspection: a Sketch Page/Note Pad, a Measuring Device to help calculate the square footage of the home, and a Camera. The Measuring Device and the Sketch Page help the appraiser gather and take note of all of the important quantitative information about the subject property (i.e. – square footage, bed/bath count, garage spaces, deck/patio size etc…) which will be needed for comparative purposes on page two of the appraisal report. Whereas the Camera is utilized to help capture all of the qualitative factors (exterior quality, interior condition, views, location etc…) of your home that may have an influence on the market value of the property which will also be used on page two of the report. That being said, there is one other very important tool that every appraiser must be able to utilize to the fullest: their Eyes.
An appraiser’s eyes, and the ability to know what to look for, are an important asset while completing the interior/exterior inspection of the subject property. The appraiser’s eyes help gather all sorts of data from the condition of the property, what kind of roofing/fencing is used, to noticing a sprinkler/security system, being able to locate a propane/septic tank, to determining the materials used for the walls/floors/countertops or whether the wood trim is painted or stained. It is the appraiser’s job to take note of the key features, both inside and out, that make the subject property the home that it is. Before any values can be determined, the appraiser must make a conscious effort to gather as much information as possible about the property in the 30 minutes to 1 hour that the appraiser typically spends completing the inspection of your home.
As the inspection comes to an end, the appraiser will commonly conduct an interview type process with the homeowner. The appraiser will typically ask about such things as: any recent improvements/upgrades/repairs made to the property, and if so, when they were done and how much they cost, any previous sales or listings on the market within the past 36 months or so, and any PUD/HOA dues and the amenities that accompany the affiliation with these residential associations. After the Q & A session, the appraiser may describe the process of selecting the most reasonable comparables, how those comparables are utilized in determining the final value as found by the sales comparison approach, and how the adjustments are made on the sales grid.
What the Home Inspection is Not
A home inspection from an appraiser is not to be confused with a home inspection from a certified home inspector. An appraiser is not qualified, nor expected, to inspect the property for major deficiencies such as mechanical, electrical, plumbing, environmental, mold, structural, and/or similar related matters that would require a higher level examination of the building components by an expert. Again, a home inspection by an appraiser is a brief, topical, visual inspection only. If these issues appear in the home, on a level that could be seen per a brief, topical inspection, the appraiser is expected to disclose such information. However, the appraiser will not perform testing of outlets, scope the sewer line, analyze the load factor on the basement beam to see if the building is structurally sound, or peel back drywall to see if there is mold.
So…That’s Who I Am & That’s What I’m Doing in Your Home…
Thanks for Having Me.
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