What Does a Home Appraiser Look for?

By Emily Southey | 15 minute read

Whether you’re buying or selling a home, a home appraisal may be a key part of the process. Therefore, it’s important to know what house appraisers look for and how to prepare your home for an appraisal to ensure it goes smoothly. Continue reading to learn all there is to know about house appraisals. 

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Home Appraisal Definition

First things first, what is a home appraisal? An appraisal is a process by which a professional home appraiser determines the value of a home. Home appraisers provide an impartial and unbiased judgment on the value of the property, and they do this by visiting and inspecting your home. An appraisal is useful in many circumstances, such as if you’re selling a home, buying a home with a mortgage, or refinancing your existing mortgage. The purpose of a home appraisal during the homebuying process is to find out if the home’s listing price is appropriate given its condition, location, and features.

Home Appraisal Process

The home appraisal process begins when a party involved with the home sale contacts a home appraiser to schedule an appointment. On the date of the visit, the appraiser will arrive at the property and spend roughly one to two hours inspecting the interior and exterior of the home. They will also measure the home’s square footage and assess the amenities and fixtures of the home, as well as its floor plan functionality and the number of bedrooms and bathrooms. An appraiser may also compare the home to other comparable homes in the neighbourhood.

As the appraiser makes their way through a home, they will note any conditions that negatively affect the value of the property, such as items that need repairs. All of this information will then be compiled into the appraisal report, which will be delivered to all relevant parties within a few days.

Typically, most home appraisers are licensed or certified and must be impartial (that is, they cannot have any direct interest in the transaction). The cost of home appraisals varies and is typically paid for by the buyer/borrower.

Appraisal Report

An appraisal report is a detailed analysis of the home appraiser’s findings. It will describe the home’s interior and exterior, the neighbourhood, and comparable nearby sales. Based on the appraiser’s observations, the end of the report will feature a conclusion on the property’s value according to their observations described previously.

Typically, most appraisal reports include the following:

• • • A map showing the appraised home and the comparable sales used in the analysis;
    • A sketch of the home’s exterior;
    • An explanation of how the square footage was calculated;
    • Photographs of the home from all angles (front, back, street);
    • Photographs of each comparable property used (from the front); and
    • Other relevant information used by the appraiser to determine the property’s worth (for example, market sales data, public land records, or public tax records).

After receiving the appraisal report, we advise all sellers to consult with their REALTORS®, especially if the appraised value differs significantly from the listing price. In the event that the appraiser assigns a low value to your property, a buyer might use this as leverage to negotiate. If you’re working with a REALTOR®, let them handle the buyer. However, if you’re selling your home without a REALTOR®, you may need to negotiate directly with the buyer on how to handle the difference.

Home Appraisal Checklist

Below is a home appraisal checklist revealing what appraisers look for when determining the value of a home:

• • • The condition of the home, with a focus on any damage
    • The condition of the appliances (dishwasher, oven, washer/dryer), HVAC system (furnace, air conditioning, water heater), and other mechanicals
    • The size of the home and the lot
    • The landscaping
    • The roofing and foundation
    • The number of rooms, bedrooms, closets, bathrooms, and windows
    • The lighting and plumbing systems
    • The number of fireplaces
    • The condition of a swimming pool or sprinkler system (if applicable)
    • The condition of the basement, including whether it is finished or unfinished
    • The presence of premium features or amenities (marble countertops, hardwood floors, or high-end appliances)
    • Whether any upgrades, renovations, or remodellings have been done

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Surprising Factors that can Affect a Home Appraisal

Now that you know what a home appraisal is, you may be wondering which factors can impact a home appraisal. Below are some of them.

• • • Location: Location is a key component of a home’s value. The same house in a nice neighbourhood will be worth far more than the house in a less desirable neighbourhood. While the neighbourhood is one aspect of the location, the exact positioning and lot of the home will also be assessed. For example, a property on a large lot or on a quiet street like a cul de sac will likely be worth more than a home on a small lot or located next to a highway or train tracks.
    • Square footage: Home appraisers always measure the square footage of a home to assess a property’s value. To do this, the appraiser will count the number of storeys and measure all livable spaces of the home to determine its overall square footage. Generally speaking, the greater the square footage, the higher the home value.
    • Style of the home: The design esthetic of the property will also be included in the appraisal. The decor will not be evaluated but any permanent design choices will be. Homes with classic design styles tend to be valued higher than those with trendy styles (especially if the trends are now out of date).
    • The number of bedrooms and bathrooms: The number of bedrooms and bathrooms in the home is another factor that can influence its appraisal value. The appraiser will compare the home to others in the neighbourhood that have the same number of bedrooms and bathrooms. The more bedrooms and bathrooms a home has, the higher the appraisal value typically is.
    • Current housing market: Like location or square footage, the condition of the real estate market will always impact the appraised value of a property. That is why regular home appraisals are necessary, as the value of homes is constantly fluctuating according to the market. In addition, whether the current market is a seller’s market or a buyer’s market will also be taken into account.
    • Renovations and upgrades: Any renovations, upgrades, or improvements will also be factored into the appraised value. Certain renovations serve to increase a home’s value more than others, such as a remodelled kitchen or bathroom. New landscaping or a finished basement can also add value to a property.
    • Age of the home: The age of the home is another factor that will be considered by the home appraiser. However, don’t assume that a newer home translates to a higher home value. In some cases, older homes can be valued above newer homes, especially if they are located in historic areas or have unique property features like mature trees.
    • Construction materials: Believe it or not, the type of materials used to construct the home may also be evaluated by the home appraiser. The better quality the materials, the higher the home value.

What Home Sellers Need to Know About Appraisals

As you now know, a home appraisal can be a useful tool in determining the value of a home. However, home appraisals can be double-edged swords for sellers. If a home appraisal is ordered by the seller before their home is put on the market, it can help them determine an appropriate listing price. But if the appraisal is done after, conducted at the behest of a prospective buyer, and the appraised value ends up being less than the listing price, the seller might need to reduce their price. If you find yourself in the latter situation, another option is to hold out for a cash buyer who will close the deal without a home appraisal contingency, but this can significantly prolong the selling process.

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If the appraised value of your home is lower than expected but you don’t want to reduce your selling price, you can hire a second home appraiser to evaluate the property in case they assign a higher value to it. You could also contact the previous appraiser if you believe that your home was undervalued due to nearby foreclosures or short sales. If you can convince the appraiser that your property is in far better condition than comparable homes in the area, they might agree to raise the appraised value. One final option is to complete some repairs or renovations to increase the appraised value of the home.

Getting Home Ready for Home Appraisal

Many factors can impact a home appraisal. Luckily, knowing what these factors are can help you ensure your home appraisal goes as smoothly as possible. As a seller, preparing for a home appraisal is critical, especially if you want the appraised value to be as high as possible. Continue reading for a list of tips on how to get your home ready for a home appraisal.

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1. Be flexible when scheduling a home appraisal

Our first tip to prepare for a home appraisal is to be flexible when it comes to scheduling. In a hot real estate market, home appraisers are likely to be booked up weeks in advance. To have an appraiser visit your home and write the appraisal report can take upward of a month. Therefore, if you want to put your home on the market as quickly as possible or move forward with a home sale transaction, try to work around the appraiser’s schedule.

2. Research the market value of your home

Although it’s the home appraiser’s job to research the local housing market and comparable home sales in your area, as a seller, it couldn’t hurt to do some independent research into the market. Plus, if you have a rough idea of the market value of your home, you can mention this to the appraiser when they arrive, as well as provide them with the information or documentation that led you to reach this calculation.

3. Make a list of completed improvements

The more information you can give the home appraiser about your property, the better. For this reason, we recommend making a list of any and all improvements you’ve made to the home and when they were completed. While home appraisers are experts in their field, there are certain improvements they may not be able to tell from a simple visual examination (for example, if you recently replaced the AC unit or had a deck installed in the backyard last summer). If you’ve made a list of improvements to show them in advance, it can help confirm the value of those improvements in the mind of the appraiser.

4. Research comparable sales in your area

Another way to prepare for a home appraisal is to research comparable home sales in your neighbourhood. Again, a home appraiser will conduct their own research on comparable sales, but it certainly doesn’t hurt to do your own research, especially as someone who knows the area well. You can then present your research (and supporting documentation) to the home appraiser when they arrive.