CHICAGO (Oct. 20, 2022) – The Appraisal Institute, the nation’s largest professional association of real estate appraisers, is encouraging homeowners to be prepared when an appraiser visits.
Hire a qualified appraiser
“The best way for homeowners to avoid potential problems with appraisals is to ensure the appraiser hired by their lender is highly qualified and competent,” said Appraisal Institute President Jody Bishop, MAI, SRA, AI-GRS. “Consumers have every right to demand the use of someone with field experience in their market and knowledge to handle the assignment properly. Appraisal Institute professionals with an SRA designation are highly educated and experienced and held to a higher standard in the profession.”
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)?
Have all relevant property information ready
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?
Inform the appraiser of home enhancements, improvements or upgrades
If homeowners are considering making improvements to the property prior to selling, appraisers can help those consumers determine which projects likely would yield the best potential 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.
Review your appraisal report
“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 if needed,” Bishop 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.
For more consumer information about appraisals and appraisers, visit the Appraisal Institute’s website: https://www.appraisalinstitute.org/news/fact-sheets/all/