Whether you are buying or selling, it’s valuable to understand the appraisal report of the home. Keep reading to find out what an appraisal report is and how it is created. This knowledge will give you a leg up in understanding this important real estate document.
There is an entire MasterClass given to the subject of appraisal reports. In it, the definition of an appraisal repost is described as “a detailed document that outlines a property’s value based on its quality, condition, location and surrounding market conditions. A real estate appraiser compiles this objective report after performing an in-depth examination of the property.”
Geographic competency is of paramount importance when hiring a real estate appraiser. If you’re in need of a real estate appraiser in Northeast Florida, we highly recommend James M. Daylor, Inc. James is our local and trusted appraiser. He is generous enough to share his process, as outlined in this article, as a way for buyers and sellers to gain a better understanding of this topic.
Define the Neighborhood & Compare Homes
The first indispensable step to creating an appraisal report is defining the neighborhood of the home. By defining the neighborhood, you are narrowing down the area in which you will compare the property being appraised to other existing homes. An appraiser may drive around the neighborhood, imagining themself as a buyer, and look for comparable homes to the property that he or she is appraising.
Assess the Physical Structure
After first defining the neighborhood of the property and then finding comparable homes, the next step in the appraisal process is to assess the physical structure of the home. The actual age of a home is just like it sounds- the number of years that have passed since the home was built. The effective age of a home takes into consideration renovations that have been done and how well the property has been maintained. For properties that have been poorly maintained the effective age could be greater than its actual age. This compulsory assessment is done by visibly observing the grounds. Kitchens and bathrooms are of utmost importance in this assessment. Crawlspaces and attics are not included.
Adjustments
A real estate appraiser will then talk with the sellers of the home for more information. There are never two identical homes, so adjustments are necessary. An adjustment aims to associate a dollar amount between the differences in properties, such as golf course view vs. standard view or pool vs. no pool. What amount is the difference worth? This can be particularly tricky when it comes to determining the square footage of a home when a porch has been converted to a sunroom or a garage to a bedroom. There can be a tendency to overprice these renovations as being more valuable on the market than they are. A garage that has been transformed to a bedroom may increase the home value by $10-20K, depending on other factors of the home.
Curb Appeal
We all know that buyers are emotional. A home that has been pressure washed and has blooming flowers will be much stronger on the market than a similar home without that attention to detail. Real estate appraisers can be similarly impacted. If mold is visible on the outside of the home, an appraiser is going to look with more scrutiny and suspicion as to how well the inside of the home has been maintained.
This information can serve you well in allowing you to view the home you’re selling or the homes you’re interested in purchasing through the lens of a real estate appraiser. While it is beneficial to have this perspective as a buyer or seller, it is not a substitute for having all the right real estate professionals by your side.
Reach out to the Fluid Realty team today for help in buying or selling your home. The Fluid Realty Team is Jacksonville’s top real estate group and local boutique brokerage. We provide a full-service experience with the best realtors in the area. Our expertise includes luxury beach real estate within the four Beaches of Jacksonville, FL: Atlantic Beach, Neptune Beach, Jacksonville Beach, and Ponte Vedra Beach.
