When you sell a home, the lender is going to require that a home appraisal be done. Most banks won’t (and in some cases aren’t allowed to) lend over the appraisal value, so it’s important to find a competent professional who will give your home a fair evaluation.
Do you have a say in who appraises?
The vast majority of the time, the lender or the real estate company will pick the home appraiser themselves. This is to avoid the appearance of bias. Washington Mutual found themselves in legal trouble a few years ago, accused of driving up appraisals to sell homes for more, and now the process of choosing an appraiser has some restrictions on it. Still, there are some instances wherein you might be choosing an appraiser – maybe you want to get an idea of how much the home is worth before you sell it, or maybe you’re getting a second opinion on an appraisal that came back different than what you or the buyer were expecting. Here are some questions to ask when making your decision.
Is the appraiser licensed certified?
This should be pretty obvious. All 50 states require licensure or certification for home appraisers. This helps you know that there is a baseline level of competency that the person performing your appraisal will have. Licensure is a national baseline, but many states also have advanced certification processes. Find out if your state has those, how it differs from the regular licensure, and whether that extra credential is worth it to you.
Is the appraiser FHA Approved?
In some instances, you may find that your hands are tied. FHA loans are increasingly popular. Since they’re insured by the Federal Housing Administration, lenders feel more comfortable giving them out to a wider variety of people, often with lower interest rates than other loans. This makes home buying attainable for more people, which means your odds of selling are higher. But it also means you may need to find an FHA-approved real estate appraiser. This will diminish the pool you have to pick from.
Is the appraiser experienced?
You want a steady hand on the till through this process. This is the value of your home, and you want someone who’s been around long enough to know what they’re doing. An appraiser with at least 10 years of experience under their belt is going to give you the surest results. You also want to make sure that the appraiser is experienced with the type of property that you’re selling. This won’t be much of a problem for residential sales, but it’s still something to keep in mind. Also, find out whether the appraiser will do it themselves, or send a trainee. A trainee might be fine for you, but you deserve to know what you’re getting into.
Does the appraiser know the area?
This is very important. An appraiser might have experience with homes, but that’s not the same thing as having experience with the area. If the person doing the appraisal doesn’t know the workings of the market your home is in, there’s a chance that the appraisal could come up short – which could derail your sale.
How much will the appraisal cost?
The national average for appraisals is between $300-$400 dollars. Depending on where you live, you should probably set $400 as a maximum when paying for an appraisal.
