Tuesday, April 14, 2015

Let's talk Appraisals

We just had an appraiser in our office to update us on what is going on in the appraisal world.  It was very interesting, he said that they are now requiring appraisers to have a bachelor's degree and a 2 year internship. That means that we have fewer and fewer appraisers in the field which may slowdown the appraisal turn around time and may get much more expensive.  They are also holding the appraisers to a much higher standard on their appraisals, meaning that if they over look anything it can effect their career and licensing. For more information see the link below:

How will this effect the home buyer or seller?  It may be more costly on the buyers side for getting an appraisal done, both buyers and sellers may be effected with longer turn around times, and sellers will want to be more particular when getting their home ready to sell.  The positive side for both buyers and sellers will be the sellers may be looking at their home with a better eye for getting it ready to sell so there will be less issues with repairs on the back end.  (Sellers should not follow an appraiser or inspector around, let them do their work)

What should a good Realtor do for you on the appraisal side?
Most appraisers appreciate the help if the listing agent provides good solid comps and the agent gives the information in a way of saying "This is how I got to the value when listing the home" or "Why I felt this was a good offer to accept" and leave them for the appraiser to look at and walk away.  It also is a good idea to make a list of all the upgrades (last 5-10 years) or special features that the property has and leave that as well.  The key words here are "leave it" don't try to explain it or engage into a conversation as this is the very thing the appraiser shouldn't do.  (Never try to steer the value, just provide facts about the property in writing and walk away).

What does an appraisers check list look like?

1.  Carbon Monoxide Detectors:  (Sellers Responsibility)  One on every level of the home and 15 feet from sleeping areas.  The link offers the California guidelines for CO detectors.  http://osfm.fire.ca.gov/strucfireengineer/pdf/bml/Frequently%20asked%20questions%20on%20Carbon%20Monoxide.pdf
2.  Smoke Detectors:  (Sellers Responsibility)  http://osfm.fire.ca.gov/informationbulletin/pdf/2013/13-006_SB745_Smoke_Alarm.pdf
3.  Hot Water Heaters Strapped  (Sellers Responsibility) Must be functional and doubled strapped  http://www.seismic.ca.gov/HOG/waterheaterbracing_08-11-04.pdf
4.  Defferred Maintance, Healthy and Safety Issues, obvious deterioration, Dry Rot, Fences falling, empty or green pools, dark substances that appear to be mold and these are just a few.
The key here is if they can see it he has to report it.
5. Electricity, Water, and Gas need to be on for the home inspection and the appraisal:  If these things are not on when an inspector or appraiser goes out they can not do their inspection.
6.  Heating and Air Conditioning must be functional
7.  All Kitchen appliances must be functional
8.  Pools/Spa's:  Must be working, Full, and not Green (They will also look to see that a pool is fenced and/or if they have alarms on all outside doors)
9.  Out Buildings:  They will look at the condition of the building.  They must appear to have been well constructed in a good workmanship manor.
10.  Stair Hand Railings:  (Staircases indoors and on decks/patio's over 30 inches)  Must be sturdy and not loose.
11.  GFI's must be installed within 6 inches of any water sources:  IE: Kitchen, Bathrooms, Laundry, and sinks.
12.  Soundness:  No broken/missing exterior windows/doors.
13.  Security: (All doors/windows to be lockable and secure)
14.  No Exterior Peeling Paint or Bare Wood
15.  Any Un-permitted Building/Additions: If so completed in a "Workman Like Manner"
16.  Any noticeable Dry Rot or Mold:
17.  Any Bare Wires:  (Light fixtures or wall plates)
18.  Fire Rated Doors from Garage entrance to Property:  (No Doggy Doors allowed in fire rated doors)
19.  Attic Ladders:  Must be installed meeting fire rated regulations

What Value is generally added for:
Pools:  $10 to $15 Thousand depending on the condition of the pool.  (Some elaborate pools may get a little more.
Mother-in Law Quarters:  This can be subjective depending what kind of comps can be shown with and without such quarters in the neighborhood.
Solar Systems:    Leased Systems have no value as they are not owned.    Seller owned usually the appraiser will take the cost of the solar system minus the tax rebate and add 1/2 of that cost.  Sometimes utility bills can be used as well to add some value.

Make sure the home is clean and tidy.  Most appraisers will tell you that cleanliness of the home does not matter. But, it is often assumed that maintenance and repairs being kept up go hand in hand with an image of a well maintained home.  Clean always gives the appearance of good.

If you have any questions give us a call or if you want to share any of our blogs with friends or relatives just direct them to our web-sites and look under our blogs.  (they are all available there)
                          http://skrohn.golyon.com/            or                 http://sborchelt.golyon.com/     

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