Appraisal Institute Tells Homeowners How to Prepare for Appraisal
February 18, 2014 08:00 AM
With the spring home-buying season approaching, the nation’s largest professional association of real estate appraisers today encouraged homeowners to be prepared with all relevant property information when an appraiser visits.
Contrary to incorrect interpretations of appraiser independence requirements, appraisers welcome information that would assist development of a reliable, credible opinion of value. Consumers can accompany appraisers when conducting the property inspection and may provide the appraiser with any information they consider important.
Homeowners should ask their lender for permission to do so, and confirm the appointment. Most importantly, the property owner should take note of whether an adequate inspection is performed. Did the appraiser spend enough time at the property to observe important features or improvements or potential problems?
“The best way for homeowners to combat potential problems with appraisals is to ensure the appraiser hired by their lender is highly qualified and competent,” said Appraisal Institute President Ken P. Wilson, MAI, SRA. “Consumers have every right to demand the use of someone with field experience in their market and knowledge to handle the assignment properly.”
If homeowners are considering making improvements to the property prior to selling, appraisers can help those consumers determine which projects yield the best return on investment. Typically the basic upgrades – from painting the walls neutral colors to installing new fixtures – offer the largest returns. After those, homeowners can add value by undertaking renovation projects that bring their homes up to – but not beyond – community norms. Projects known to offer a good return on investment include updating of kitchens or bathrooms, adding a bedroom and improving a home’s curb appeal.
When the lender hires an appraiser, consumers should ask:
• What professional designations does the appraiser have and from whom?
• How long have they been in practice?
• What level of experience do they have in this particular market and with this type of property?
• Is the appraiser familiar with property in this neighborhood?
• What types of clients has the appraiser had (homeowners, estates, lenders, relocation companies)?
“Only by reading a copy of their appraisal report can consumers double-check the accuracy of factual information, such as the number of bedrooms and bathrooms and the property’s square footage, and question the result,” Wilson said.
Consumers are entitled to a free copy from the bank of whatever appraisals, reviews, computer valuations and other data are used in the transaction promptly upon completion of the appraisal report, no later than three days prior to the loan’s closing.
To find an appraiser, visit the Appraisal Institute’s website and use the Find An Appraiser function. For more information on home improvement projects, see the Appraisal Institute’s Remodeling & Rehabbing brochure.
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The Appraisal Institute is a global professional association of real estate appraisers, with nearly 22,000 professionals in almost 60 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at www.appraisalinstitute.org.