When you sell your house, the bank requires a licensed
appraiser to estimate the market value of your house.
After the lender receives a purchase contract for the
sale of your house, they will order the appraisal. An
appraisal is a professional opinion of the current value
of your house and is good for six months. In order for
the buyer to qualify for the loan, the appraised market
value must be equal to or greater than the amount of
the loan.
To estimate the market value of your house, an appraiser
researches the houses which have sold in your subdivision
and your immediate market area (within one mile if possible).
Only houses that have sold in the past six months, and
preferably within three months, and are similar to your
house in regards to livable square footage area, age and
material amenities (swimming pool, fireplace, garage) are
considered.
An appraiser should be at your house for approximately
thirty minutes to an hour. They will measure your home,
take photographs, draw the floor plan and note the amenities
in your house. You can help the appraiser by preparing
a list of recent material improvements (new roof, replaced
windows, room additions) that have been done over the past
several years. Include the approximate amount spent for
each improvement. Cosmetic improvements do not usually
add to the value of the home, but can be very instrumental
in selling the home. Conversely, poorly maintained or untidy
property, including cosmetic things like carpeting that
needs replacing, walls that need painting, excessive clutter
in the home, and landscape deterioration, can result in
your house being on the market for an inordinately long
period of time.
If your buyers use an FHA or VA loan, a few special requirements
are placed on your house. If the loan is FHA or VA, all
paint chips and peeling paint must be removed from all
surfaces of the house. Missing and damaged shingles must
be replaced, as well as missing or broken slats in the
fence. Finally, interior/exterior paint and carpet cleaning
are the least expensive ways to improve the overall appeal
of your house. The appraiser will provide a typed appraisal
report to the lender involved in the transaction.
A professional appraiser can answer any specific questions
you may have regarding the process.
