We all know closing day is the most exciting part of a home purchase, but taking a few minutes to prepare for the appraisal can allow your buyers to reach the closing table with less headache and stress. I'm not talking about scrubbing the floors or cleaning out that cluttered closet, although it may help. I am talking about providing relevant factual data about the property being appraised. An appraiser can obtain only so much information about a property from public records or MLS listings. This is where the owner and listing agents can help.
In many instances major repairs or upgrades have been made to the property that may not be obvious from a visual inspection, such as a newer heating or air conditioning system, new plumbing pipes, new electrical wiring, or new roofing. Many appraisers are in the habit of checking building permits when they are available on-line, but in some areas they can only be obtained in person. Having a list of these repairs and upgrades, with their approximate cost and date of completion, can help the appraiser assess the hidden condition of the property. Fannie Mae's UAD requirements specify the appraiser state whether or not the kitchen and baths have been updated, and the years since the update. If the kitchen and baths have been updated provide a cost and date of completion for these items as well. If there is an addition to the house let the appraiser know and provide the permit number if available.
A site survey is useful for FHA related appraisals when there is on an site septic system, where the separation between the septic system and well must meet certain requirements. This can also be useful for any questions regarding right of way interests or setbacks.
Many lenders now require the utilities (water, electricity, gas if available) be on and working at the time of the appraisal inspection for conventional loans. If not on the lender may require they be turned on for the appraiser to verify, causing a delay and additional expenses. If the house is vacant or for some reason the utilities are turned off check with the lender or appraiser to see if they have to be turned on.
Any other items regarding the property or neighborhood, such as features or amenities, can be useful to the appraiser. If the house is located in a neighborhood with a homeowners association the appraiser will need to know the fees and what the fees cover. In some cases the lender wants to know if there are any legal suits pending against the association. The phone number and name of the association president or management company will help expedite this process.
Finally take a look around the house for any items that may present a safety hazard such as exposed wiring, a missing stair rail, or missing fence around the swimming pool. These items may trigger a red flag from the lender and a requirement that they be repaired before closing. Don't assume that because you are using an as-is contract for sale the appraiser or lender will ignore a deficiency. They won't.
These are just some of the items an appraiser will look at when inspecting the house and neighborhood. There are too many issues to address individually, but in general the more information the appraiser has the more accurate the report will be. Don't hesitate to supply any information available to the appraiser to assist in completing the appraisal report.
