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About the Author
Linda Ross is a California Real Estate Broker as well as a California Certified General Real Estate Appraiser. She works extensively in the coastal communities of Orange County, with her primary office at First Team Irvine. Linda entered the real estate industry in the mid-1970's, and has seen Orange County -- and property values -- grow!
"If you want an agent who not only knows the market but who can negotiate well on your behalf, call Linda. Her knowledge of Orange County markets is unbeatable, and her positive attitude and resourcefulness make her a powerful ally whether you're buying or selling a home!"
Linda Ross can be reached at:
Direct Line:
(949) 584-9750
Office:
(949) 857-2121
Fax:
(949) 857-6403
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Email:teamross@home.com
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By Linda Ross
A Buyer's and Seller's Guide to Appraisals.
By the time you hear the word "appraisal" from your Lender of choice, you will have invested quite a bit of your time finding your new home before taking that giant step toward home ownership. Once you have committed to a particular home and chosen a Lender (whether it be a bank, credit union, mortgage broker, mortgage banker, or other financial institution), the Lender will typically require an appraisal on the home for mortgage lending purposes.
In general terms, an appraisal is an estimate of the most probable price a property would command in the open market as of the date of inspection by the Appraiser. This estimate is often referred to as the fair market value of a property. The value of a property is dependent on many factors: age, condition, size, amenities, view, and the all-important factor of location. Your Lender will arrange for an Appraiser to inspect the property and prepare an appraisal report, an integral part of your loan process. Both the Buyer and the Seller need to work together to ensure that the Appraiser receives all information and cooperation necessary to produce a qualified estimate of market value in the shortest time period possible.
Below is a "consumer's" guide to appraisals, for Buyers and Sellers alike, to help ensure timely loan approval -- and the keys to your new home!
1. Make sure that all "non-family-friendly" animals are secured during the Appraiser's inspection of the property. If your dog or other pet is placed in the garage, an outside dog run, or other location, let the Appraiser know in advance.
2. Have ready for the Appraiser a copy of the purchase agreement and the Transfer Disclosure Statement (also called the "TDS"). The Appraiser should know the terms of your contract, as well as the condition of your home. In addition, copies of any supplemental reports prepared by third parties, such as a home inspection report or geological study report, should be given to the Appraiser. Remember, Appraisers, by profession, value property: they are not home inspectors, structural engineers, or geologists!
3. Have the Sellers prepare a list of any home improvements, remodelling items, or additions completed during the course of their home ownership, as well as copies of the contractor bills (if available) indicating the cost of these improvements. Also, have copies of the permits for this work available for the Appraiser. Municipal and county building departments don't always have accurate or complete records. Providing this information to the Appraiser may prevent a delay in processing the appraisal report -- and help speed up the loan process!
4. If you are selling a custom home, or if there has been extensive remodelling and/or additions, provide the Appraiser with a set of blueprints, if available, to be returned to you. Blueprints give the Appraiser an accurate overview of the home improvements. Most Appraisers have the floor plan pages reduced in size to include in the appraisal report.
5. If the home is part of a homeowner's association, have ready for the Appraiser the amount of the dues (monthly, quarterly, or yearly), the number of associations paid (some homes are subject to both a master association and a "sub-association"), and the name and phone number of the association or property management company. The latter is particularly helpful in the appraisal of condominium properties.
6. Sometimes homes sell "FISBO" (for sale by owner), and Appraisers may not have access to the Buyer or Seller to determine the condition and quality of the home at time of sale, terms of sale, and so on. If you have knowledge of FISBOs or other sales, let the Appraiser know -- by doing so you may provide important information regarding the value of your home!
7. Insist that the Appraiser take photos of the interior of the home during the inspection. Photos of the interior in key rooms, such as the kitchen and baths, "paint a picture" of the overall quality and condition of the home, and very often help underwriters in the loan process.
8. Determine from your Lender whether the Appraiser's fee is to be paid at the time of inspection or paid from escrow proceeds at the close of escrow. In any event, the Appraiser's fee is never contingent upon escrow closing, and provision for payment should be made in advance of the inspection date.
9. Inquire of your Lender the level of expertise of the Appraiser. If your new home is water-oriented, has the Appraiser had experience with water-oriented homes? If a custom home, a view home, a home with a large lot -- in short, if your new home has that certain "special" feature -- make sure that the Appraiser has the requisite experience to arrive at a qualified opinion of value!
10. This may sound simple, but here it is: Be There! If you miss your appointment with the Appraiser, the loan process may be delayed. Always call either your Lender or the Appraiser directly if you need to reschedule your appointment.
By following the above quide, the appraisal report should be right on track with the processing of your loan. And remember: By law, you are entitled to a copy of the appraisal report if you have paid for it. Always ask your Lender to provide a copy of the appraisal report for your records.
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