WHAT IS AN APPRAISER?
People often ask what it is that I do, or how does someone become an appraiser. A homeowner will sometimes follow me around as I do an appraisal inspection of their home, and ask about why I am measuring the home or what it is that I am looking for.
So, let me explain what is an appraiser, and what we do.
For mortgage lending purposes, most residential appraisers are completed by licensed or certified appraisers. Licensed appraisers cannot perform appraisals on residential properties valued at over $1 million. Certified appraisers have two further categories: certified residential (homes of any value) and certified general (which also allows commercial use appraisals regardless of value).
Appraisers have hundreds of hours of education on various aspects of the profession, including real estate, contracts, real estate law, lending guidelines, valuation techniques and even specialized education such as green energy (solar panels) or waterfront properties. In addition, most appraisers will spend two or more years as an apprentice or trainee before they are even allowed to apply for and take an examination test for licensed or certified. Commercial appraisers – those with a Certified General license – will have even more education and on hands training.
So, an appraisal inspection is like a home inspection? It is actually very different.
An appraisal inspection of a residential home will typically include the interior and exterior of the home and other improvements (garages, barns, sheds, guest houses, etc.). The level of inspection is a visual walk through non-invasive inspection, meaning the appraiser will not be moving your furniture, or checking the AC unit’s freon levels, or inspecting the electrical system or loose roof shingles. That is actually what a typical home inspector will do in their inspection and requires a separate license as well.
An appraiser will look at the overall quality of construction and condition that is visible in a typical walk through of the home, noting upgrades and remodels, as well as deferred maintenance and repairs that are readily apparent. These observations are considered in the overall development of the appraisal results based on the type of lending being done, specific lender guidelines or requirements, as well as either Fannie Mae, Freddie Mac, FHA or VA requirements.
An appraiser will measure the improvements, i.e., the home, garage, patios, etc., in order to determine any discrepancies from tax data or MLS records. Comparable sales that are used in the appraisal are primarily based on similar or nearby location, similar size, salient features (bedrooms, baths, garages, pool, etc.), and other factors, while keeping to the required guidelines.
To recap, an appraiser verifies the size of your home, the quality of construction and condition based on observations from a walk-through inspection, analyze relevant data of similar comparable homes (verify tax and MLS data, photograph the comparable sales and listings, etc.), and complete an appraisal report that provides a summary of all the appraiser’s findings based on lending guidelines. The amount of time that an appraiser spends at an inspection typically depends on the size of the home but is just a small part of the overall time required to complete a full appraisal report of your home.