Tips To Ensure a Successful Appraisal
When it comes to the home appraisal process, providing complete and accurate information is critical for a successful appraisal. Real estate agents and loan officers play an important role in ensuring appraisers have the necessary data to deliver reliable valuations.
Whether you’re representing a seller or assisting a buyer, the more accurate and complete the information you provide, the smoother the process will be. Today I thought I would discuss the essential information needed for a successful appraisal, explain why each item is important, and highlight how inaccuracies can lead to complications.
Before we get to that I wanted to share a video of an interview I recently did. I had the opportunity to discuss some common questions people have about the appraisal process with Massachusetts real estate agent Kevin Vitali.
We discussed numerous topics including the key differences between appraisals and comparative market analyses (CMAs), what factors influence property value, and how renovations can impact your home’s worth, among other things. You can watch the video here:
Now let’s continue with the discussion of what documents are necessary for a successful appraisal:
1. Accurate Address
Why It Matters: An accurate property address ensures the appraiser evaluates the correct home. Mistakes in the address can lead to confusion, wasted time, and potentially costly delays. For properties in subdivisions or rural areas, where GPS may not be reliable, additional directions or landmarks can also be helpful.
Tip for Agents: Double-check the property address before submitting it to the appraiser, ensuring it matches all marketing materials and legal documents.
2. Accurate Legal Description
Why It Matters: The legal description uniquely identifies the property in question, often including lot boundaries, subdivision details, and specific measurements. An incomplete or incorrect legal description can complicate the appraiser’s research and lead to errors in the valuation.
Tip for Agents: Provide the legal description directly from the deed or title report to ensure accuracy.
3. Accurate Survey
Why It Matters: A current and accurate survey highlights property boundaries, easements, and encroachments—all of which can affect a property’s value. For example, a shared driveway easement or an encroachment by a neighboring structure can impact marketability and appraised value.
Tip for Agents: If a survey isn’t readily available, check with the seller or their title company. Always confirm that the survey reflects the property’s current configuration.
4. Parcel Identification Number (PIN)
Why It Matters: The PIN is a unique identifier used by tax assessors and local government offices. It helps the appraiser locate property records, tax data, and any relevant historical information that may influence the valuation.
Tip for Agents: Include the PIN on all documentation you submit to the appraiser, especially if the property has multiple parcels or unusual configurations.
5. MLS Listing Sheet (if Listed for Sale)
Why It Matters: The MLS listing sheet provides a snapshot of how the property is being marketed, including key features, recent updates, and the asking price. This information can guide the appraiser’s initial understanding of the property and its market positioning.
Tip for Agents: Highlight any corrections or updates to the MLS data before sending it to the appraiser. For instance, if the seller recently replaced the roof but it’s not reflected on the MLS, make sure this information is included separately.
6. Fully Executed and Signed Sales Contract
Why It Matters: A signed sales contract provides essential details about the agreed-upon price, terms of sale, and any concessions. This document gives the appraiser insight into the motivations behind the sale and can help identify atypical terms that might affect value, such as seller financing or significant repairs included in the deal.
Tip for Agents: Submit a complete and legible copy of the sales contract, and clarify any unusual terms that could influence the appraisal.
7. List of Recent Improvements and Renovations
Why It Matters: Upgrades like new flooring, HVAC systems, or kitchen remodels can significantly impact a property’s value. However, appraisers need specific details, including the type of improvement, the date completed, and the cost.
Tip for Agents: Provide a detailed list of upgrades, ideally with receipts or invoices. Include both minor updates and major renovations to ensure the appraiser accounts for all improvements.
8. Comparative Market Analysis (CMA) or List of Comparable Sales
Why It Matters: A CMA or list of comparable sales used to price the home offers valuable context for the appraiser. It highlights market trends and comparable properties that the agent deemed relevant. Additionally, pointing out sales that aren’t good comparisons—due to poor condition, unusual terms, or other factors—can save the appraiser time and ensure more accurate valuation.
Tip for Agents: Provide a detailed CMA or list of comps with explanations for why certain properties were chosen. Include notes on sales you believe are not good comparisons and explain why.
9. Other Relevant Information
While the above items are essential, there may be other pieces of information that help the appraiser perform a more accurate valuation:
- Homeowner Disclosures: Notes on any known issues, such as foundation cracks, water damage, or roof leaks.
- Neighborhood Details: Recent developments, such as a new school or shopping center, that may affect the property’s appeal and marketability.
- Special Features: Unique aspects of the property, such as energy-efficient upgrades or historical significance, that may not be obvious from a standard inspection.
Tip for Agents: Consider asking the seller if there’s anything unique about the property that an appraiser should know. Share this information proactively.
Risks of Inaccurate or Missing Information
Providing incomplete or inaccurate information can have significant consequences:
- Delays: Missing data can slow down the appraisal process, potentially jeopardizing closing timelines.
- Inaccurate Valuations: Without complete information, the appraiser might undervalue or overvalue the property, creating challenges for both buyers and sellers.
- Increased Costs: If errors are discovered after the appraisal is completed, a re-inspection or additional appraisal may be necessary, adding time and expense.
How a Professional Appraiser Can Help
A seasoned appraiser understands the nuances of evaluating properties and can guide real estate agents through the process. Beyond lender-required appraisals, appraisers offer services for:
- Pre-Listing Valuations: Ensure the property is priced correctly from the start.
- Estate Planning: Provide accurate valuations for inherited properties.
- Tax Appeals: Assist in contesting inflated property tax assessments.
- Divorce Settlements: Deliver unbiased valuations for equitable property division.
- Home Measurement Services: Verify square footage for accurate marketing.
Let’s Make Your Next Appraisal a Success
As a real estate appraiser with decades of experience, I’m here to ensure your clients receive accurate and timely valuations. By working together and providing the right information upfront, we can streamline the appraisal process and avoid unnecessary complications.
If you’re a real estate agent looking for a trusted partner to handle your appraisal needs—whether for pre-listing evaluations, tax appeals, or unique properties—I’d love to help. Contact me today to discuss how we can make your next transaction as smooth and successful as possible.
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