How does an appraiser determine a home’s value?

How does an appraiser determine a home’s value?

Lenders in Illinois nearly always require homebuyers to get a house appraised prior to issuing a loan. According to Bankrate.com, problems can occur when the appraisal falls below the sale price of the home.

Mortgage companies will typically only approve loans that are at or below the appraisal. Therefore, industry experts recommend that sellers obtain an appraisal before ever listing a home.

As any real estate attorney in Elk Grove would know, there are several factors used to determine the value of a home. Choosing the right appraiser and taking the correct steps can help an owner get an accurate and even favorable appraisal.

The major factors

RealEstate.com points out that the first thing an appraiser will do is make a note of how large the property is in terms of the acreage and the number of rooms in the home. In most cases, the more bedrooms and bathrooms a house has, the higher its value will be. Appraisers look at this as valuable because it indicates that the buyer could either expand the home if the property is large or expand a family if there is enough room in the house.

Several other key factors that affect appraisals include the following:

  • The home’s interior: What type of materials were used in the construction of the home? Hardwood floors will be more valuable than carpet, for example. High-grade kitchen appliances, nice lighting features and quality doors can also boost a home’s value.
  • The home’s exterior: The appraiser will examine the foundation, siding and roof to look for any signs of damage that could detract from the overall value.
  • Home improvements: A seller who has made upgrades, such as a renovated bathroom or kitchen, may have increased the value of the home.

Appraisers may not always notice an improvement, which is why a real estate attorney in Elk Grove may recommend providing them with a list of all upgrades.

Before the appraisal

RealEstate.com suggests that sellers perform a few simple tasks before the appraiser starts. Cleaning the home and making any necessary repairs to leaky faucets or chipped paint may seem subtle, but it can make a difference. Additionally, if there have been any foreclosures or short sales in the neighborhood, those numbers could skew the comparative data an appraiser may pull. Sellers should present the person with as much information as possible to give an accurate picture of the neighborhood.

Choosing an appraiser

Bankrate.com reports that it is vital to choose an appraiser who has a professional designation, such as membership with the Appraisal Institute. The person should also be certified in residential appraisal. Failing to check for these accreditations could result in a short appraisal, which compromises the sale of the home.

Selling a home can be time-consuming, but the extra effort can result in getting a better price. Anyone with questions should consult with a real estate attorney in Elk Grove.

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