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A Guide to understAndinG A residentiAl ApprAisAl
I have heard about problems with appraisers traveling long
distances to appraise homes? How far is too far?
The issue isn’t so much “distance” or “how far is too far,” rather the question
that should be asked, “Is an appraiser from outside of my area competent to
appraise my property?” Some appraisers work in many geographic areas and
are knowledgeable and competent in all of them. Other appraisers have a limited
range in which they normally appraise and they may not have the data or the
experience to be competent outside their local market.
What information should I provide to the appraiser?
The more information the appraiser has about your property, the better he or
she will be able to develop a credible result. The appraiser will be interested in
knowing if there are any private agreements or restrictions, easements or rights
of way, encroachments, “agreed to” arrangements with abutters (e.g., fences,
walls) on the property, etc. The appraiser may ask about the property’s title, sales
and rental history, and occupancy. He or she might ask if the property is under
a pending purchase and sales agreement or option and, if so, the details about
the agreement or option. If the property sold in the past three years, the appraiser
may ask about the details of the transfers. Finally, the appraiser may inquire about
physical characteristics of the property, including any additions, permits, etc.
If you are hiring the appraiser directly, the appraiser will want to know what the
intended use of the appraisal will be. (NOTE: If you are engaging the appraiser to
prepare an appraisal for a federally-related transaction, you should know that the
lender or the lender’s agent is required to engage the appraiser).
What should the appraiser do when he or she inspects my home?
Based on the client’s intended use of the appraisal, the appraiser determines
whether an interior and/or exterior inspection or no inspection is required. Under
many circumstances, the lender will require a full viewing of the property including
an exterior and interior inspection.
Assuming that a complete inspection is required, the appraiser inspects the site,
site improvements, and building improvements. The appraiser considers the site’s
size, shape, topography, drainage, and any other attributes that may affect
value. He or she views the site improvements (e.g., paving, fences and walls,
landscaping) to determine their contribution of value to the property. Finally, the
appraiser inspects any structures. Some of the items considered are building style,
number of stories, size, number of rooms (including bedrooms and baths, etc). He
or she observes the structure’s condition as an aid to estimating depreciation. In
addition, the appraiser considers the property as a whole, including the dwelling