Kathy Wall

Appraisals
February 12, 2012 ·  

Whether you are looking to refinance your home or to purchase a new home, an appraiser is going to have a big impact on whether you get your loan.    Anytime you get a home loan, the bank will send out an appraiser to determine the value of the home.  

I attended a meeting yesterday with one of the top appraisal companies in the Bay Area, a company by the name of Axis.    Their very difficult job these days is to let the banks know exactly how much your home is worth. 

Receiving your appraisal can sometimes be shocking, particularly if you believe your home is worth more than all of the other homes in the neighborhood.   Following are just things that you need to take into consideration when reviewing an appraisal you have received:

1)    If you have spaces in your home that are unpermitted, the appraiser cannot consider them in their appraisal.   They will only consider legal rooms in their appraisal and their primary consideration is the gross living area, not the garage, basement or stairs.  

2)   Is every part of  the house connected to the rest?   If you cannot access the whole home through the finished interior, the separate entry area may not be considered as part of the gross living area (GLA) and is given a separate value, even if  it is a legal space.      

3)   The size of your yard may or may not help your appraisal.   If the land is flat and usable, it will get more weight in the appraisal than a big lot with no usuable space.    In addition, if your home has a view it will, possibly, get a better valuation.  

4)   Appraisers can only consider comparable sales in the same neighborhood as yours.    Unless there are absolutely no othe comps, they will not use sales from adjacent neighborhoods.  

5)   They try to use sales data no older than 90 days, so if your neighbor’s home sold 6 months ago, they will most likely not take that into consideration.

6)    If the appraiser notices significant defects, such as large cracks in the foundation, plumbing/electrical that is clearly not permitted, they will take that into consideration.

All that being said, if you receive an appraisal that you are positive is not correct, you have the right to appeal the appraisal.   They key to your appeal will be to clearly show that there are good reasons why your home should be valued higher than other properties in the area.    You need to be clear, consise and present cold hard facts.   

And, when appealing or disageeing with an appraiser, it is important to remain calm and as pleasant as possible.  Remember, they are not out to harm you, they are simply doing their job.   Like all of us, they are not perfect, however and most appraisers are willing to listen if you have data that may change their valuation.    Keep in mind that although the appraisers have guidelines they must follow, making an appraisal still has subjective factors.  One appraiser may give more weight to a bay view than another one might.

Lastly, if you have an appraisal appointment set up and realize before the appraiser comes that he/she is from another area and knows nothing about your area, you have the right to request a different appraiser. 

I hope that you find this information helpful…If you have additional questions, please don’t hesitate to contact me.

Kathy Wall
Prudential California Realty
(415) 608-4168
DRE #01163766

Kathy Wall Kathy Wall  (34 Posts)

Welcome to my blog site!! I really enjoy writing and love real estate, so the blog has been a way to share both. I have been a Realtor for almost 18 years, specializing in all types of residential real estate. I have sold everything from standard single family homes to land and even mobile homes. My favorite thing is helping buyers purchase their first home. I am partnered with my Son, Michael Darling, and together we make a great team. We have listed and sold homes throughout the entire Bay Area. Our primary focus is San Francisco and the Peninsula, specializing in Brisbane, San Francisco, Pacifica, San Bruno, Millbrae, and San Mateo. In my spare time, I am a singer and have performed in several of the better San Francisco cabarets. Please check out my website at michaelandkathy.com, as well as my music @ kathwallsings.com.

 (Read more about the author...)

If you enjoyed this post, subscribe to the Author's RSS feed or the Blog's RSS Feed!

Filed Under F A Q, Important Thoughts, Our Answers, Real Estate Finance, Real Estate for Buyers and Sellers

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Print Print    |    Email Email

Comments

5 Responses to “Appraisals”

  1. Brian Boisson on February 13th, 2012 7:57 am

    Kathy,

    Great info.

    It is important to let our buyers and sellers know that things like bonus rooms, converted garages, in-lws, etc. are an appraisal issue for purchase loans.

    Thanks,

    Brian Boisson
    Prudential California Realty

  2. Karin on February 13th, 2012 3:35 pm

    I hear FHA appraisers have calmed down a little. I hope so!

  3. John Gieseker on February 13th, 2012 6:00 pm

    Thanks Kathy, especially appreciate the idea about he “out of town appraiser”. With the recent rules that were imposed on lenders and how they pick and appraiser I know this can be a problem. It’s nice to know we can do something about it.

  4. Larry Franzella on February 14th, 2012 1:40 pm

    Great tips, great reveiw!

    Larry Franzella
    Prudential California Realty

  5. Jean Joh on March 6th, 2012 10:57 pm

    Thanks for a very informative blog Kathy! I was talking to one appraiser recently, and she said the companies are now requiring that an appraiser have “expertise” in the area that they’re going to appraise, so hopefully, the number of “out of town” appraisers will decrease. An appraisal is such a crucial part of any home purchase involving a loan (and refinances as well), so it helps to know what factors may be involved.

    Jean Joh
    Prudential California Realty
    http://www.JeanJoh.com

Leave a Reply