Residential Home Inspection: What Homeowners Need to Know and Do
Joseph A. Hasson June 25th, 2008
A residential real estate appraiser’s primary job is to determine an “opinion of value” as of an effective date. The inspection is one of the means that an appraiser uses to gather data in determining this “opinion of value”.
Setting the Appointment:
A typical scenario is the refinancing of a home and the bank/lender is sending out an appraiser. When the appraiser calls to the schedule the inspection appointment, feel free to offer up some information on your home. However, stick with the facts regarding the physical attributes of the home and DO NOT discuss the value (how much you think your home is worth). (More about this later.)
My initial phone conversation with a homeowner includes the following:
• Does your home have a particular style?
• How many floors does your home have?
• Does your home have a basement? Is the basement finished?
• How many bedrooms and bathrooms are there?
• Does your home have a view, e.g., lake, mountain, city, territorial?
• What is the condition of your home?
• Have you updated the interior in the last 5 years?
• Have you replaced any major systems of your home?
• Is there any on-going construction in your home?
Honesty is the best policy when it comes to answering these questions. You can expedite the appraisal process, save the appraiser a lot of time and frustration and the overall cost of the appraisal by being forthright with these answers.
Before the Appraiser Arrives:
Once the inspection appointment has been and set, you should tidy-up the home before the appraiser arrives. I say tidy-up because cleanliness is not the goal. Instead, the goal is removing the everyday clutter so the appraiser can see the amenities of your home. Unbelievably, I’ve been to homes with so much clothing on the floor that I did not know whether the room was carpeted or had hardwood floors. Why is tidying up so important? Because, in addition to the required exterior photos of the home, front and back, most lenders now want to see interior photos of the home. These photos speak volumes about the condition of your home.
The living room, kitchen and baths have become the standard required interior photos, but photos of special features such as custom designed family rooms with floor to ceiling fireplaces or media rooms with built-in seating with movie screen, may also be include in the report. On the exterior, photos of sport courts, garages and ponds may be included.
An appraiser also has the responsibility of photographing defects of the home as well, especially when they affect value. So be proactive and finish those projects so the bank/lender does not see the hole in the wall where the door handle broke through the drywall, or the dangling light fixture that was missing one part, or the bathroom tile work that wasn’t as easy to install as they said on the home improvement show. The same goes for the exterior. Broken down cars, no matter how much you cherish them, should not be on blocks in your front yard. Do you have a ladder against the home? Take it down and put it away. The bank/lender may assume the ladder is there for an unfinished repair. Avoid the costly situation where the appraiser is recontacted to return to your home to take more photos or hiring a roof inspector to confirm that the roof is in good condition.
The Appraisal Visit:
The appraiser arrives, and your house is clutter free and looking good. The appraiser will walk through the home, look in every room and take notes. The appraiser performs the inspection in order to assess quality, condition and amenities to determine the home’s value. If there are items that you think are special features in the home that may be overlooked by the appraiser, feel free to bring those to the appraiser’s attention. You don’t want an appraiser to overlook a bathroom, wet bar or any finished living space that is behind a paneled or locked room. Many older homes have built-in features including desks, stereo/intercom systems and foldout ironing boards. The appraiser may not attribute value to all amenities, as some may not be fully appreciated in the market place to typical buyers, regardless of how much money they cost to build or replace.
Stay Professional:
Many homeowners ask the appraiser how much they think the house is worth. This is not an appropriate question to ask at the time of the inspection. The appraiser should actually refuse to answer this question to comply with USPAP (Uniform Standards of Professional Appraisal Practices) and respect the client/appraiser relationship that, in part, led to the credit crisis fiasco in the sub-prime market. You will learn the value of your home when the appraiser has delivered the completed appraisal report to the bank/lender. The homeowner has a legal right to view this report.
Good Luck.