Understanding Appraisal Process
Understanding Appraisal Process. Before anyone can buy a house with a loan from a bank, refinance a mortgage, settle an estate, finalize a divorce, get a pre-listing valuation or many other instances, the lender, your attorney, the courts or yourself will need an objective assessment of the property’s value — after all, the home is not only the bank’s collateral for the loan but also possibly our largest asset. Assessing the value is the job of the appraiser.
Appraising a home is not simple. Similar homes just a few blocks from one another can have very different values. The street that a home is on, size of the dwelling and condition — each factor contributes to its value. The best appraisers are intimately familiar with the neighborhoods they work in.
School Districts also play a major role locally, along with subdivisions and quality of construction. Additionally, appraisers record the square footage, the number of bedrooms and bathrooms, and other basics, but they also consider the overall condition, deeming it good, average, fair or poor.
Some owners who put in high-end finishes may be disappointed, because there is no category for super excellent. While some buyers may be willing to pay more for those finishes, there is a difference between what the market will perceive as adding value and what an appraiser will determine. Depending upon the local market and the subject’s sub-market, this very well could be deemed as an over improvement to the neighborhood by appraisers and the market. The market typically would be a ready, willing and able buyer in the typical sense and this factor would be reported as such within the appraisal report.
Once an appraiser has evaluated a home, he or she compares it with similar ones that have recently sold, known as comparables, or “comps,” and these sales should be in the same neighborhood. But some areas of Pittsburgh, similar homes a few blocks apart can have different values based on proximity to transportation, schools or a parks. Other Pittsburgh neighborhoods may be close to or located on one of our rivers. This can go either way and it is up to the appraiser to look at each market and ascertain any positive or negative influence.
In Mt. Washington or Shadyside in the City of Pittsburgh for example, sales within a few-block radius can range from $40,000 for a dilapidated home, to over $1 million for a renovated home with original woodwork. You see, there are many factors that an appraiser must consider when preparing an appraisal.
Market trends! These also factor into a home’s value and can be hard to pin down, especially if prices in a specific neighborhood rise quickly. Because it can take two or more months from the time a contract is signed on a home to the time appraisers learn of the offer, such fluctuations are not always reflected in the available comps. Appraisers can make what is called a time-adjustment to account for market shifts. At least in the Pittsburgh market we have not seen drastic rapid price appreciation, at least not yet.
The best thing a homeowner or broker can do to help the appraisal process is to prepare a one-page sheet for the appraiser that outlines the changes and repairs that the home has undergone since it was purchased. This helps the appraiser get a better understanding of the condition of the property that may not be visible and will help in the final estimate of value in the appraisal report.
Given the complexities of many City of Pittsburgh areas, having appraisers familiar with the neighborhoods in which they work is crucial. This is where you can rest assured Pittsburgh Appraisal Group is in YOUR corner. Being local is what Pittsburgh Appraisal Group is all about. We work harder than our competition to make sure that your appraisal is as accurate and thorough as possible. We are also friends with many Pittsburgh real estate professionals and our appraisers have friends, family or both living close by as we visit frequently on a personal level. This experience and these connections have made the staff at Pittsburgh Appraisal Group intimately familiar with the nuances in the Pittsburgh real estate market.
So if you need a City of Pittsburgh appraiser, please consider using Pittsburgh Appraisal Group. We’re not just Allegheny County’s Best Appraisers; we are Pittsburgh’s Best Appraisers. Please contact us and let us prove it or see our reviews & testimonials. To learn more about Pittsburgh Appraisal Group and all of our appraisal services, start by visiting our Home page.