What do Appraisers Look at When Appraising Your Home?

As I’ve mentioned in a couple previous posts, we are in the middle of refinancing our home.  So far we have:

• Applied online with our credit union 
• Been approved with a 4.875% 30 year fixed loan
• Submitted pay stub information
• Submitted insurance and tax information to escrow
• Had our home appraised for $416,000

We are now awaiting notification that we are ready to sign and close at escrow.  Once that is done, we will have completed the refinance.  The process has been very painless but I’m still anxious to get it completed.  We’ve seen rates go a bit lower and now they seem to be going up more.  There’s no telling where rates will go tomorrow.  If you figure out a way to do that, please let me know.

The most stressful part about the entire process has been the appraisal.  At first I had envisioned that the appraiser would come by, take a few measurements outside and then leave.  That’s not how it works.  She actually comes in to the house and looks the place over as well.  Here are the things that the appraiser was interested in:

• Total square footage:

She measured every wall on the outside of the house and also measured a few walls on the inside

• Condition of the house:

She looked over all of the fixtures and noted where we had hard wood floors, linoleum and carpet.  She also noted that we had new wood siding (I walked along with her to be sure she knew of the improvements we’ve made)

• Features:

She noted that we had central air conditioning, a sprinkler system, gas fireplace and other features that would be considered optional in a home.  It’s really important to help describe the features in your home to be sure that nothing is missed.

All of these things contributed to the overall value of the home.  As she walked through the house she also took pictures of each room.  I’m really glad that we did a thorough cleaning job prior to her coming over.  I believe it’s important to have your house very clean and in top shape for an appraisal.  Appraisers may not intend to, but they will ultimately consider how clean your home is as a measure of the overall condition.

When I finally saw a copy of the appraisal I was able to see pictures and details about the local “comps” that she used to help determine the value of our home.  These comparable’s are homes that are of similar age and style and have sold within the last 6 months.  This was a huge part of the calculation of our home value.  The appraiser actually used homes that sold as long ago as July which I believe helped keep our home value a little higher.  The reality is that I think our home is worth a little less than she calculated but it really doesn’t matter.   The bottom line is that either way the appraisal shows there is plenty of equity in the house to lower the risk for the lender.