What Do Home Appraisers Look For? 5 Things Buyers and Sellers Should Know

Appraisals can feel mysterious, but here’s what really matters.

When a buyer is financing a home, the appraisal is an important part of the escrow process. A home appraisal provides an independent professional opinion of the property’s market value and helps the lender determine whether the home provides adequate collateral for the loan.

So what does the appraiser actually look at?

1. Condition of the Home
The appraiser will walk through the interior and exterior and note the home’s general condition. Visible deferred maintenance, permanent features and the overall condition of the property may all be considered.

2. Size & Layout
Square footage, number of bedrooms and bathrooms, floor plan and overall functionality of the home are important factors.

3. Improvements & Updates
Upgrades such as a newer HVAC system, remodeled kitchen or bathrooms, updated windows, landscaping and other permanent improvements can provide useful information for the appraiser. Sellers may want to have a simple list of improvements available.

4. Lot & Location
Lot size, neighborhood, location and other property characteristics can influence value.

5. Recent Comparable Sales
The appraiser researches recent sales of similar properties in the surrounding market. Differences in size, condition, location, lot and features may be considered when comparing those properties with the home being appraised.

Appraisal vs. Home Inspection

These two are often confused, but they serve very different purposes.

A home inspection focuses primarily on the condition and operation of the home and its systems.

An appraisal focuses primarily on determining the property’s market value.

Both can be important steps during escrow, but they answer very different questions.

How Can a Seller Prepare?

You do not need to completely remodel your home before an appraisal. Instead, make sure the appraiser can easily access the property and have helpful information available about improvements that may not be immediately obvious.

I like to have a concise seller-provided list of improvements and updates available for the appraiser, along with relevant information about the property.

Understanding the appraisal process ahead of time can make this part of escrow feel much less intimidating.

If you’d like guidance on preparing your home for an appraisal, I’m happy to help.

Berit Hayden
DRE#01442543
Coldwell Banker Realty
714-552-7754

Living Life in Orange County, California
@livinglifeinoc-berit