There are many essential steps to buying or selling a house. However, home buyers and sellers often have questions about the home appraisal process and how it impacts the home sale.

Both buyers and sellers need to understand this process so that your home purchase, or sale, goes as smoothly as possible. Below we’ve included some home appraisal checklists for you to use and better understand the overall process.

Large modern home with a three-car garage and a well-maintained yard will be highly appraised.

 

What exactly is a home appraisal?

A licensed, independent real estate appraiser gathers information about the house and surrounding property during a home appraisal process to estimate its current market value.

Most often, appraisals are ordered by the mortgage lender, financing the mortgage for the buyer. The homebuyer typically pays for the assessment either up-front or at the time of closing.  

 

What happens during a home appraisal process?

During the home appraisal process, the appraiser makes a thorough inspection of the house inside and usually takes 1 – 3 hours to complete depending on the size of the house and property.

First, they measure each room and the lot the property sits on while photographing each room and the home’s exterior. They will then write up their report and submit it to the lender between 7 – 10 days, depending on how busy the housing market is in your area.

 

The home appraiser will first look at:

Any signs of safety and health hazards

• The home’s physical condition (paint, roof, fencing, etc.)
• The structural integrity of the home
• Upgrades or improvements (new cabinets, countertops, flooring)
• Visible defects (foggy windows, holes in the wall or floor)
• Any conditions set by the lender
• If appraisers have concerns about these items, they may order a specific inspection to determine the problem’s scope. Below is a more detailed checklist of what a home appraiser may look at inside and outside the home.

 

Exterior Home Appraisal Checklist

• Total acreage or land area of the property, to ensure actual measurements match the property description
• Condition of the foundation and roof
• Condition of the chimney
• Curb appeal
• Quality of the landscaping (trimmed bushes, mowed lawn)
• Condition and type of driveway surface
• Type and state of the garage
• Condition of the pool and other exterior amenities
• Interior Home Appraisal Checklist
• Amount of livable space and number of bedrooms and bathrooms to ensure these numbers match the property description
• The functional condition of the HVAC system
• Any built-in appliance upgrades
• Any peeling paint if the house was built before 1979 to ensure compliance with lead-based paint laws
• Type of basement or crawl space
• Quality and condition of the plumbing and electrical systems
• Material and needs of the windows, floors, and walls
• Evidence of pests or termites
• Energy-efficient features
• Permanent upgrades (home addition, kitchen island, built-in shelves)
• General upkeep of the home
• The home’s square footage does not typically include garages and basements unless these spaces have a closet and egress window, which allows them to be counted as a bedroom or liveable space.

 

Loan specific home appraisals

Depending on the type of home loan you’re approved for, your loan may have additional or specific requirements that may be on the home appraiser’s checklist.

 

FHA Home Appraisal Checklist

FHA appraisals are a little different and have special requirements. The most significant difference is that any repairs found during the inspection must be completed before closing.

This requirement affects both the buyer and the seller because the home loan process absolutely cannot progress until these repairs are completed.

 

An FHA appraisal checks:

• Exposed wall studs or floorboards
• Peeling or chipped paint, especially lead-based paint in homes built before 1979, must be scraped and painted.
• Water damage caused by leaks in the foundation, plumbing, or roof 
• Holes in the siding or roof, which must be repaired.
• Sidewalk or driveway damage, which must be corrected.
• Must replace any outlets within 10 feet of a water source with GFCI outlets.
• Any exterior outlets must be grounded plugs or GFCI outlets designed for bathrooms, kitchens, and garages.

 

VA Home Appraisal Checklist

VA home appraisal inspections have their own set of standards for acceptable home conditions, which include:

• A water heater, clean drinking water, and a sewage system
• Working electricity and HVAC
• A sound foundation
• Sound roofing
• A termite and pest inspection
• Appropriate living spaces, including the kitchen, living room, and bedrooms
• Any safety or health concerns or needed repairs will slow down and possibly stop the closing process until the buyer or seller fixes them. Additionally, a VA-certified appraiser assigned by the Department of Veterans Affairs must complete the home appraisal for a VA loan.

 

That is not a complete checklist of what a home appraiser will look for in the home. However, it is a list of the most common issues that may arise. For example, sellers are better equipped for a smooth sale when they make repairs and upgrades before the appraisal inspection.

Once the appraiser has all the information they need, they write up their findings on a form called the Uniform Residential Appraisal Report, and the completed report is then sent to the buyer’s lender for the next steps in finalizing the loan amount.

Messy living room with white sofas, chairs with blue cushions, and everything ready for the house appraiser.

 

What type of information is on the home appraisal report?

Subject 

This part shows basic information like the property’s address to be appraised, who the borrower, the lender, and the home’s current owner are, what the property taxes are on the house, and if the home has been for sale in the last twelve months.

 

Contract 

This section of the report states whether the appraiser analyzed the sales contract. In addition, it displays the contract price and the date executed the agreement, along with information describing any sales concessions being paid on behalf of the borrower.

 

Neighborhood 

A description of the neighborhood along with housing market conditions and neighborhood boundaries is shown in this section. In addition, neighborhood characteristics such as urban, suburban, or rural are described.

Finally, the appraiser states whether the values of other homes in the area are increasing, stable, or decreasing in value.  

 

Site 

The Site section describes the land the property is on. In this section, you’ll find the site’s dimensions, shape, view, and whether it conforms to current zoning.

In addition, information is included on the utilities supplying the house, whether those utilities are public or private, and whether they are typical. Finally, the appraiser comments on any adverse site conditions, such as soil or ground conditions.

 

Improvements 

In this part of the appraisal, the appraiser gives a general description of the property, including the condition of the house’s foundation, exterior, and interior. The garage and driveway area, attic, appliances, fireplace, porch, and deck are also included under improvements. 

That is where the appraiser states the square footage of the house, describes any additional features of note, gives an overall description of the property’s condition, whether any physical deficiencies were noted, and states if the property conforms to the neighborhood.

 

Sales Comparison Approach 

The Sales Comparison Approach section of the home appraisal process is where the appraiser arrives at a value and substantiates the value of the appraised house. That is done by locating comps, also known as comparable properties. 

Comps are homes as close as possible in structure and features to the house being appraised. When finding comps, appraisers also consider properties close in physical proximity and sold them within the last year.

Next, the appraiser gives a detailed description of each comp, including address, selling price, square footage, and features, among other things. Then, they use this information to arrive at a market value for your property.  

 

Reconciliation 

In the reconciliation portion of the appraisal, the appraiser states the property’s appraised value and whether this value is made “as is” or subject to any necessary repairs.

 

Additional Comments 

In this appraisal section, the appraiser can write any additional information to help support the market value they arrive at. They can also report any vital information that didn’t include elsewhere on the appraisal form.  

 

Cost Approach 

That is a type of home valuation method that appraisers often use when appraising a newly built home. It is the cost of land plus the cost of construction minus any depreciation.

 

Income Approach 

The Income Approach to evaluating a property is primarily used when appraising apartment buildings, offices, condominiums, or any other property that generates income.

 

PUD Information 

This section deals with establishing an appraised value for a PUD home or a home located within a Planned Unit Development. PUDs are neighborhoods with a master plan: single-family homes or attached homes.

In a PUD, the homeowner owns the house and the ground beneath it. Whereas with a condo, the owner only holds the interior walls and space within those walls.

 

It’s your turn to be a homeowner in New Jersey

If you are interested in acquiring your new home or selling the one you have, do not hesitate to contact our EXP Realty consultants. We guarantee quality attention and the best homes in the area, with personalized marketing strategies to achieve the most significant benefit.

You will not regret working with us because we seek your best interests. Our clients certify them.