What Does A Real Estate Appraiser Do?
In purchasing real estate, you deserve to get the best value for your money. To do this, you need to first undergo the process of identifying the property’s worth before hiring a real estate agent who will help you in buying or selling it. For instance, if you intend to purchase or sell real estate property in Houston, a Houston real estate appraiser can help you identify the property’s worth as they have advanced knowledge and expertise about this matter.
But what are real estate appraisers and what do they do? Continue reading below to know more about their roles and responsibilities.
Check Interior and Exterior Conditions of a Property
As the primary duty of your real estate appraiser is to evaluate your property’s value, they have to see its features personally and examine every part of it. Through assessing the condition of your property, they can provide expert judgment on its value to make sure that it’s highly marketable. Here are the main features and conditions that your appraiser will look for:
- Your property is fit for habitation. The first criterion that a real estate appraiser will evaluate is the existence of your property. You have to provide the location of the property so they could visit it. Also, the property should be located inside a neighborhood near residential and commercial properties, and is accessible by utility services.
- Never forget the outdoors. Even though people will stay longer inside the property, it’s not an excuse to neglect the outdoor condition of your property. The front yard and backyard should be clean and presentable. Enhance the landscape by highlighting its selling points. You can add more decorations, such as flower pots. Eliminate all trash, clutter, and irrelevant objects. Most importantly, the appraiser will measure the dimensions of the outdoor lot.
- Excellent indoor quality for greater marketability. Aside from the exterior quality of your property, the indoor quality will contribute more to its market value. Larger square footage of livable space is naturally better than small ones. The appraiser will assess every part of the house, especially the bedrooms, in which numerous ones will add to the property’s market value. Other qualities to be checked indoors are entrance points, ceilings and walls, emergency exits, and heating and cooling systems.
Appraise the Value of a Property
As the highlight of the transaction, a real estate appraiser sets the value of your property to be sold in the market according to their evaluation and assessment of its overall condition. Aside from real estate agents, real estate appraisers also play a crucial role in real estate transactions, though beginners in the real estate context are still unfamiliar with appraising.
Here are some factors that real estate appraisers look at before estimating your property appraisal value:
- Location: A property located among nature will have greater value than a property near malls or factories.
- Age: An old home doesn’t automatically get a lower appraisal value than a new one. If a home was built 10 to 20 years ago, then it will likely have a high appraisal value. An old home located in historic places that have stood strong for years will also have a high appraisal value.
- Style and Design: Aesthetic appeal such as finishes and decorations will contribute to a higher appraisal value.
- Curb Appeal: This refers to the outdoor appearance or landscaping of your home. Healthy green mowed lawns with flower pots will look more appealing to buyers than tall grasses with unknown plants.
- Square Footage: The real estate appraiser will also look at the square footage of your overall property and assess how well it’s distributed.
- Recent Renovations: Updated bedrooms, kitchen, and living rooms provide higher appraisal value. New technology and devices installed in the house are also excellent contributions to the appraisal value.
Compare Listings Relevant to Yours
After the physical inspection, appraisers also need to analyze the market environment, particularly the market trend. They perform in-depth research to arrive at the final appraisal by looking at similar properties. These relevant properties are called comparables. Even though the comparables won’t be precisely the same as your property, it will still give the appraiser an idea where to set the bar for your property’s value.
The appraiser can search comparables that are both sold and currently listed in the market. However, these comparables should be those sold only recently, as the real estate market varies all the time. Depending on the features and characteristics of the comparables, the appraiser will adjust the value of your property accordingly.
Moreover, market variability also presents an advantage. Your real estate appraiser can adjust the price if the predicted market trend through market analysis has a greater chance of being favorable to your property. Your appraiser can make further adjustments if you decide to enhance the property itself and the surrounding environment.
Research and Create Appraisal Reports
Through detailed research, the appraiser can finally decide on the final appraisal value of your property and organize all the necessary documents. The appraiser will write and provide pictures of the property in the report, explaining its strengths and weaknesses. For every feature discussed, the appraiser should be able to explain how it affects the market value of your property.
Generally, the report should contain and explain the whole appraising process, including the inspection, comparables, research, and fair observations. As the property seller or buyer, the most important thing to keep in mind is that the appraised value of your property is subject to future changes.
Take Note of Changes in the Real Estate Market
One of the biggest challenges that appraisers encounter is dealing with these market changes. Essentially, market trends create a significant impact on property values due to various influences. The greatest contributor to the varying appraised value of your property is the fluctuating appraisal prices of comparables existing in your area. Appraisers need to be up-to-date with the changing prices, lest you will be put at a disadvantage.
Aside from adjusting the appraisal prices based on the comparables, the appraiser needs to examine the income approach data to predict the fluctuations in the properties’ vacancy rates, which is known as the percentage of all available and unoccupied units in a property. This method will greatly contribute to defining the final appraisal.
Appraisers also have to take note of the supply and demand in real estate. Put simply, having a high demand while properties are scarce can translate to an increase in prices, and having less demand with a substantial number of properties can cause real estate values to drop.
Buying and selling real estate is not a walk in the park. It needs the best real estate appraisers in the field to make sure that the work gets done excellently. Before hiring one, make sure that you have an idea of what appraisers do so you can transact with them smoothly. Hiring appraisers might cost you more than the typical real estate transaction with real estate agents, but their skills and expertise will greatly benefit you in the long run.