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Role of the Appraiser
April 13th, 2018 10:14 AM

Role of the Real Estate Appraisal


If you’re refinancing you’re home or buying a new home, a major component obtaining a loan is the home appraisal. Since a home appraisal determines the value of the home you are interested in or already own, it also plays a role in how much a mortgage lender is able to lend you for your home financing. Pretty big deal for sure!

Today I’m going to talk about things you should know about home appraisals, like how they are performed, what the appraiser is looking for & what they are not looking for.

What Is A Home Appraisal?

A home appraisal is a comprehensive several page report on a property done by a licensed real estate appraiser, which determines the fair market value of the home. The report is based on a number of factors, including, but not limited to:

·       The size of the living space aka square footage

·       The values of surrounding homes or what your neighbors sold for based on what the market at the time of your appraisal will pay

·       The neighborhood

·       The year it was built


In the home-buying world, once you and the seller have agreed on a purchase price, your lender will order the appraisal from a 3rd party appraiser. The homebuyer is responsible for the cost of the appraisal, which typically ranges from $400 to $1,200+ depending on the size and complexity.

Is ZILLOW Affecting Your Homes Value? 

Unfortunately, while Zillow is a great starting point for home values, it’s not always accurate.  According to Zillow's website, which I’ve copied and pasted on 4/9/2018, here is what they say.

“The Zestimate® home value is Zillow's estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home's value and is not an official appraisal. The Zestimate is automatically computed daily based on millions of public and user-submitted data points. “

So if your home’s value is lower on ZILLOW than what your appraisal says, it’s important you update it.  This won’t be super easy, but it is necessary for your home’s marketability. 

We suggest having a Professional Licensed Real Estate Appraiser, appraise your home and then upload those results to Zillow’s Home Evaluation Updater.  It’s the only way we know works when getting Zillow to change their mind about your home’s value because it is based on a professionals opinion and not your own.  If you contact Zillow on your own without a professional Real Estate Appraisal, here is the likely response you will get per Zillow’s website:

“We do not delete Zestimates. We monitor customer feedback for systematic issues with the algorithm, but do not change individual Zestimates in response to customer feedback. The Zestimate is designed to be a neutral, unbiased estimate of the fair market value of a home, based on publicly available and user-submitted data. For this purpose, it is important that it be based on identical information about homes (e.g., beds, baths, square footage, lot size, tax assessment, prior sale price) and that the algorithm itself be consistently applied to all homes in a similar manner. This ensures that there is no preference for some homes relative to others nor are there valuations based on facts that are not accessible to all Zillow users. Some homes may be very unique in ways that are not well captured by existing data, and the Zestimate may be less accurate on these homes. To provide more data on your Zestimate, you can post your estimated value and comment in the Owners Estimate section.”

Sorry, I don’t have an easier answer to this question but sometimes it is what it is.  Feel free to contact our office to schedule a Real Estate Appraisal for your home today by calling us at 480-595-0188 or visiting us online at


How Are Appraisals put together?

The first part of the appraisal process is the real estate inspection. An appraiser will visit your home and examine the house’s interior and exterior, taking measurements and recording data about the house as mentioned above. Many things can affect the value of a home, whether you did the dishes that day or not, should not play a factor.  However, 1st impressions are important so try and tidy up! 

If you’ve done any sort of home improvements like remodeled a kitchen or bath, replaced flooring, repainted the exterior of your home, had a new roof installed or new HVAC system installed, remember to keep your receipts because this is important information the “Real Estate Appraiser,” will need to know. 

The appraiser will then compare your current home or hope to live in soon home, to other homes in that neighborhood that may be similar in square footage and lot size.  If your home is updated or completely remodeled the appraiser will look for similar homes in the area based on his or her access to SOLD homes that include data and pictures. In other words, the appraisal is not determined solely on the Appraisers professional opinion but mainly is based upon what the market is currently willing to pay for a home like yours, in your neighborhood.  If you live in a neighborhood where many bank foreclosures have occurred, no need to worry, an experienced appraiser will take that into consideration and when possible, not rely on those types of sales as they are usually lower than the typical sales price under normal conditions would be. 

What Do The Appraisal Results Mean For You?

There are two potential types of outcomes that have very different impacts. Example:

1.     You and the seller have agreed upon a purchase price of $350,000, and the appraisal value of the property comes out to $360,000. This is great news for the buyer. Assuming everything else is in order, you can proceed to close your loan as planned with $10,000 of instant built-in equity already in your home. Score! 

2.     But what if the appraisal comes back with a value lower than the offer price, like $320,000? A few things can happen in this scenario.

·       The 1st should be to ask your Realtor to renegotiate your purchase price to reflect the appraised value.  This is why hiring an experienced Realtor is so important.  People are usually emotionally attached to their homes and usually feel they are worth more than what the market is willing to pay so trying to negotiate can get a bit sticky.

·       Your lender may ask the appraiser for a reconsideration of value by sending a form that will explain justifying a higher value and should also include additional addresses within 1 mile of home that are comparable and can support a higher appraisal amount.

·       Another option is to order a new appraisal from a new appraiser. 

If purchasing a home, a lower than expected appraisal value can become inconvenient for both buyer and seller. You’ve technically offered to pay more than the home is worth, and because the mortgage lender won’t give you a loan for more than the home is worth, the deal may get dicey. If you have tried all of the above and nothing has worked but you really have your heart set on that home that you now know you will be overpaying for; you can put more money towards your down payment to reduce the overall loan amount.

I hope this helps clear up any misconceptions of the Real Estate Appraisal process and helps you realize how important a real estate appraisal really is to the consumer.  It’s one of your most important safe guards when buying a new home. 

For more questions or to “Order An Appriasal Today,” follow this link or give us a ring 480-595-0188.  We’re always happy to help!  - Angela Johnson, VP SunPoint Appraisals

Posted in:Real Estate Appraiser and tagged: Appraiser
Posted by Paul Johnson on April 13th, 2018 10:14 AMPost a Comment

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