A real-estate appraisal inspection can be a source of great concern on the part of the borrower. The first time going through this process can feel like a significant invasion of privacy; a stranger walks through your home, takes photographs, and asks you personal questions related to your property. A better understanding of this process and the appraiser’s responsibilities can help prepare borrowers to deal with these concerns.
The appraiser is basically charged with being the eyes and ears for the lender in regards to the property. This includes verifying and describing characteristics of the property, its condition, updates or deficiencies, and external factors. Such information is captured in the appraisal report and utilized by the lender in the loan decision process.
The exterior inspection includes an assessment of the site area and its surroundings for accurate identification of the site characteristics, positive/negative attributes (quiet cul-de-sac lot, busy street, proximity to commercial influence, views, etc.) that have an impact on marketability. Physical measurement of the dwelling (generally from the outside, but also from the inside for upper levels) is completed and will be sketched by the appraiser. Also, an overall assessment of the condition of the exterior components is noted (roof, siding, landscaping, etc.), and photographs are taken that include the front, rear, sides, street view, deferred maintenance, aand premium attributes.
The interior inspection includes a complete walk through the property for delineation of rooms on the applicable sketch and a visual inspection of each room (including photographs). The condition of the interior, deficiencies, updates/upgrades, quality of craftsmanship, layout, and flow of the property are noted and considered.
Finally, the appraiser will query the borrower regarding updates/renovations, deficiencies noted, and ownership. For sales transactions, information related to the purchase contract will also be polled.
About the Author
John Golden is the National Quality Control Manager for Landmark Network, Inc. He is a former certified residential and FHA appraiser and is currently on HUD's 203k consultant roster.