Appraiser Tips from Sandy
Square Footage: The appraiser uses outside measurements to detennine under air square footage. Garage and porches are measured separately.
Furniture: Furniture is considered personal property and is not included in value of real estate. Lenders will not make 30 year loans on furniture and cannot allow the value of the furniture to be included in the value of the real estate.
Tax Record: The county tax records provide a square footage of the house under air and gross square footage. Sometimes the MLS provides the gross square footage instead of the under air. The tax appraised value is typically under market value but not always. The appraiser and real estate agent should always check the tax appraised value against the market value. If the property owner is over assessed advise the owner to request a lowering of the assessed value. What a feather in your cap if you are able to bring this to thc attention of the property owner!
History/Contract: The appraiser is required by law to report all offers, listings, rentals, and sales on the property in the past year. If the property is currendy under contract, a copy of the contract must be forwarded to the appraiser along with
any addenda to the contract. If the property has been rented in the past year or is currendy rcnted, the appraiser
must di sclose the information. This information is asked for on the second page of the URAR form used by most lending institutions.
MLS: The MLS data for both sales and listings is invaluable to the appraiser and Sandra K. Adomafis, SRA St Cert. Gen. REA RZ0001517
MOST COMMON UNDERWRITING GUIDELINES
1. Comparables must be within 1 mile of the subject property. There are circumstances that will allow the appraiser to use more distant sales if there are none within a mile.
2. Comparables cannot have adjustments exceeding 25% gross or 10% net. This means that the com parables must truly be comparables.
3. Adjustments are made only if the market will support the adjustment.
4. Comnparables must be within the last 6 months to 1 year. Dated sales are not acceptable.
5. Details on FHA/ VA sales must be disclosed as to points or closing costs paid by seller.
6. Field reviews are often required on appraisals if underwriters find the appraisal to be less than supportable, if the appraiser is not approved by their company, or to you the client. The appraiser relies upon information reported in the MLS along with public record to provide support for the value of the property being appraised. Information reported incorrecdy could cause a property to be appraised at an incorrect figure.
Listings: Why are listings important to an appraiser? It tells the appraiser what the sellers in the market are expecting for similar type properties and what the supply is on the market for those type properties. This is especially important in a changing market where values aregoing up or down. Remember the appraiser is having to look at the past in order to appraise for a value today. The listings are a sign of the values expected tomorrow and will assist the appraiser in understanding the current offers. Does your appraiser have a subscription to the MLS?
Condo Association Info: The appraiser must report HOA fees, # of units in development, # sold, # rented yr round, # Units in subject phase, & # of phases. A phone # is helpful. if the loan exceeds a certain amount or loan to value ratio. The review is done by another appraiser and could change the outcome of the loan amount if discrepancies are found.
7. All sales, options, rentals, or offers in the past year must be reported.
8. Appraiser should report the days on the market for all sales to support an estimated day on the market for the property being appraised.
Written by Sandra Adomatis