Whether you’re buying or selling real estate, you’ll want to get a home appraisal. In addition, there are several other instances where a home appraisal is helpful or necessary. However, you must first know how to find a good home appraiser. So in today’s article, we’ll go over the purpose of home appraisals and how to find a good home appraiser for your rental investment.
Contents of This Article:
- What Is a Home Appraisal?
- Home Appraisal vs. Home Inspection
- When to Get a Home Appraisal
- How to Find a Good Home Appraiser
- Manage Your Rentals With BMG
What Is a Home Appraisal?
Whether you’re an investor or a property management company in Baltimore, you’re probably familiar with the home appraisal process. If not, you’ll want to become familiar with the process when you buy real estate or handle rental properties.
A home appraisal is a crucial process where a real estate appraiser determines the fair market value of your property. Ultimately, an appraisal can help find a fair market price between you and the lender you’re working with. So, whenever you go to buy, sell, or refinance a property, a home appraisal is a crucial part of the process.
Investors need to know how to find a good home appraiser to ensure they get a good property deal. It’ll let them know how much the property is worth and help determine the potential returns. If you’re unfamiliar with the process, next, we’ll discuss what a home appraiser looks for.
What Do Home Appraisers Look For?
- Condition of the Property- An appraiser looks at the property’s general condition. For instance, they’ll examine the materials used throughout the home and any physical aspects that may affect habitability. They’ll also look at the overall upkeep and maintenance-related issues.
- Age of the Property- Appraisers look at the property’s age to determine a fair market price. There are pros and cons to both new and old homes, but new construction is usually valued higher than older homes.
- Location of the Property- The location is another major factor that appraisers consider, as it plays a crucial part in evaluating the property. They’ll look at the proximity to schools and other amenities, the crime rate, and the type of neighborhood.
- Signs of Damages or Infestation- One of the major signs that appraisers look for is water damage or signs of infestation. If your home has minor water damage, you’ll want to take care of it before selling. Water damage and pest infestations can cause irreparable damage to the home’s structure, majorly impacting the value.
- Size of the Home- When appraisers look at a property, they look at the square footage and number of bedrooms to help determine the value. They’ll also examine the size of the lot the home sits on and the garage size as contributing factors.
- Home Improvements- If any rooms or parts of the home have been renovated, appraisers note it. They’ll also look at the types of appliances in the home, whether they’re energy-efficient or eco-friendly. Upgrades to the house, like new flooring, additions, new siding, etc., will impact your home’s appraisal.
Home Appraisal vs. Home Inspection
Although they’re somewhat similar processes, there are several differences between a home appraisal and a home inspection. While they’re both necessary processes, a home inspection takes a more in-depth look at a property to look for problems throughout the home. For example, an inspector will test outlets, run the furnace to see how it works, and ensure the roof is installed correctly.
On the other hand, an appraisal takes visible defects into consideration, like roof damage or a non-working plumbing system. However, they don’t look for specific issues as an inspector would. Instead, they mainly look at the overall value without examining deeper issues within the property.
When to Get a Home Appraisal
There are several instances when you’d want to get a home appraisal. Some of the most common instances are if you’re buying or selling a home. Other than that, here are some more instances where you’d need to find a good home appraiser.
- Buying Real Estate
- Selling Real Estate
- Looking for Financing
- Settling a Divorce
- Filing for Bankruptcy
- Property Tax Assessment
Buying Real Estate
When you buy a home, you’ll want to work with your lender on getting an appraisal. While it’s helpful for you to determine any significant issues with the home, it’s most beneficial for your lender. After all, your bank wants to offer a mortgage that covers the cost of the property, not more than what it’s worth.
Selling Real Estate
While it’s not always necessary, some sellers get a home appraisal before selling a property. If you cannot determine a reasonable listing price for your home, you may want to get an assessment before selling. However, the buyer’s lender will generally schedule their own appraisal. But sellers can get one to get a more accurate range for a list price.
Looking for Financing
If you want to access your home equity, knowing the property’s value is important. For instance, if you want to get a home equity loan, refinance the home, or make a home equity investment, your lender will need to know the market value of your home. That way, they can determine the amount of equity you have available.
Settling a Divorce
If you’re settling a divorce, a home appraisal can ensure the home’s value is split evenly among both parties. For example, if one person plans to stay in the house, lawyers can assess how much they’d owe the other party based on the home’s value. Then, if both parties agree to sell the home, an appraisal makes it easier to decide on a list price.
Filing for Bankruptcy
Homeowners must prove their current financial situation when they file for bankruptcy. So, they must show the court through documentation their income, debts, and value of assets, like the property their own. A home appraisal helps determine how much the property’s worth.
Property Tax Assessment
In most states, property taxes are calculated based on the value of your home. However, if you feel your home’s value is too high on your property tax bill, you can appeal the assessment. In this case, an independent appraiser will value the home and challenge your previous assessment.
How to Find a Good Home Appraiser
If you need a home appraiser, you’ll want to ensure they’re reputable, trustworthy, and thorough. As such, when looking for an appraiser to evaluate your property, you don’t want to go with the first person you find on Google. So, here’s how to find a good home appraiser for your next property.
- Ask for Recommendations
- Request Quotes From Multiple Appraisers
- Interview the Appraiser
- Look for Red Flags
- Confirm Credentials and References
Ask for Recommendations
A home appraisal is a typical part of the sale process, meaning many real estate agents are familiar with local appraisers. So, if you’re wondering how to find a good home appraiser, ask your real estate agent or another industry professional for recommendations.
Request Quotes From Multiple Appraisers
Once you’ve found a few local appraisers, you’ll want to get quotes from each. Everyone charges different rates and has various certifications, so you’ll want to have conversations with a few other professionals. That way, you can decide who can fairly value the property.
Interview the Appraiser
A thorough interview is crucial before hiring anyone to appraise your property. First, ask them about their experience, what types of homes they usually work with, and ask about their credentials and references. Next, look them up online and look at their customer reviews. You may also ask for references to verify that they do good work.
Look for Red Flags
While interviewing and searching for potential home appraisers, don’t skim past any red flags. For instance, you may want to choose someone else if they have an unreasonable price quote or lack clarity during an interview. Additionally, you’ll want to move on to another candidate if they refuse to provide documentation or references.
Confirm Credentials and References
Finally, one of the most important steps when hiring an appraiser is checking their experience, training, and references. In addition, it’s crucial to ensure they have the appropriate certifications and licenses for your state. Additionally, you may want to check with third-party organizations to ensure there are no complaints against your appraiser or their company.
Manage Your Rentals With BMG
Now that we’ve gone over how to find a good home appraiser, you can make a more informed decision for your next investment property. After all, you want to ensure your rental properties are safe, structurally sound, and ultimately profitable. Once you’ve covered that, you can start marketing your property and finding tenants.
Finding and screening potential tenants can be challenging if you have several rentals. On top of that, worrying about maintenance, lease agreements, and communicating with tenants, being a landlord can be a full-time job. Luckily, property management companies, like Bay Property Management Group, help make owning rentals easy.
Need More Advice? contact us today!
Our team offers comprehensive rental management services near Baltimore, Philadelphia, Northern Virginia, and Washington, DC. So, contact us today to learn more about how we can help your business succeed.
