THE PERFECT LISTING FROM AN APPRAISER'S PERSPECTIVE...
Appraisers review FMLS/MLS listings every day including all photos, commentary, etc. What you do and say in those listings not only helps your Seller get the highest possible price, but it can also mean higher Appraised Values and fewer calls from Appraisers! You would be surprised how many Listings I see that fall short of the below suggestions.
First rule of Thumb: Pretend you are selling YOUR own Home. Some of the best listings I see are Owner/Agents. Do your Sellers a great service and give them the same attention to detail as you would your own home. The more Appraiser's have with regard to the Property the better chance for positive results on the Appraisal.
1. PHOTOS: Clear, sharp, high resolution photos: Include as many photos as the Listing will accept. Inside photos should include at the least; Living/Family Room, Kitchen, Master Bedroom, All Baths, Dining Room, Basement Rooms and All Special upgrades and features of the home Inside and Out. You do not need a professional photographer but when someone goes to CLICK on your photos in FMLS/MLS they need to be large enough to see the details. Virtual Tours of course are a plus.
* If you are dealing with Lakefront, Golf Course, Mountain View Homes, PLEASE include a view of these amenities from the REAR of home from the Deck or Patio. This is very important for the Appraiser and the Buyers to get a feel for what their views are FROM THE HOME. For Lake of course always include views of the lake from the Boat dock, the boat dock itself, the views straight out from the dock, to the Right and to the left of the dock and toward the home so you can see things like Rip Rap shoreline and how close the home is from the dock as well as the path to the dock.
* Please UPDATE your photos for the Current Season. Nothing screams this home has been on the market a long time than a Winter Time Photo in the Summer.
2. In your description of the property under PUBLIC comments, include all major renovations & approximate year. If you have total costs of all renovations include those as well.
*Sample: Lakefront home with year round views. Renovations include: New HVAC:2012; New Roof: 2015: New Appliances: 2010; New Floor coverings: 2011. Owner put over $50,000 in total renovation in past 6 years. Include anything that is not obvious in the photos and any special amenities. Then refer them to commentary under each photo. Since you are limited in your Public Remarks section use that section below EACH photo for more information; i.e.; Under your Kitchen photos if you have upgraded appliances say something like this: "Wolf Stove, Dacor Dishwasher, Sub-Zero Refrigerator" The more details the better both for the Buyer and the Appraiser so that they can give credit where credit is due to upgrades in the kitchen or the home in general.
This kind of commentary is good for every room in the house that includes any kind of special features that may not be obvious in the photos themselves. Leave NOTHING to chance. You have the room to spotlight the home, use every bit of it for the best result.
3. DIRECTIONS: Please do not just say USE GPS in that space. There may be some Appraisers and Buyers who actually do not have GPS or their GPS may be out of date on certain streets, etc. PLEASE list out turn by turn direction to the property. Appraisers have to drive by all Comparables, so clear directions is always appreciated! Buyers will like them too.
4. Please be very careful to list all amenities about the Listing correctly in FMLS/MLS as the Appraisers use this information in their reports not only for the Subject but for the Comparable Sales.
5. SQUARE FOOTAGE/SOURCE: Please do NOT state "Appraisal" in this field unless you have an actual Appraisal on hand. If you get this from Courthouse Records State "TAX RECORD". You do not want another Appraiser using "The Appraisal" number against your Listing if indeed the Tax Record includes square footage in the basement (which many times they do). This could result in a REDUCED value for your under contract Listing!
In MLS you can separate square footage in the upper levels from the Basement. Please use that space to so designate that square footage. If you want to show the TOTAL square footage for better search results and superior selling potential then in the Public remarks please state the following:
" 3,450 total square feet all levels; 1,550 is in the basement and 1,000 of that is finished" OR if you have Appraisal say something like: 2,450 S.F. on the upper level/s and another 1,250 in the basement of which 1,025 is finished. Total heated: 3,475. IF YOU RUN OUT OF ROOM UNDER COMMENTS, PUT THIS UNDER YOUR BASEMENT PHOTOS ON THE LISTING.
6. Comments to Avoid in your Listing:
"Priced to Sell" : I don't know why, but this is the Kiss of Death. In almost every case when I see this I look at days on market and it has been on the market longer than average. Isn't the whole idea to price homes to SELL? Do you really need to say this in a listing? Use this space to outline more features of the home.
"Won't last long": Again many times I see this and Days on market are longer than typical. If you DO say this.....if that home is on the market for over 30 days, remove that wording.
7. Use those attached documents in your Listings to your advantage in the Listing. Include the DISCLOSURE STATEMENT ALWAYS. It is very helpful for Appraisers as well as Buyers. We need to know how old components are in the home up to 15 years. Also include PLATS. Very helpful for Appraisers.
8. Site Section/Description: I see many times where it lists Cul-De-Sac, when it is not. It may be on a cul de sac street further up, but not IN the cul de Sac. So technically is should not say cul de sac.
9. I know it is hard to be CREATIVE in all of your listings and not fall into the same "pat phrases" but try to point out that special thing or things about the home that set is apart from its competition and make it something that buyers want to see and Appraisers will appreciate about that home.
10: Lakefront Property: If the home is permitted for a larger dock note that in comments section of Listing. This does make a difference on Lake Site Value (permit type).
** Please do NOT state DEEP WATER Dock or especially Drought Proof if it goes dry in droughts of under 10 feet. I see this wording many times and when I pull it up on Google Aerial, which other Appraisers and Buyers will do and see Dirt under the dock, Deep Water does not seem to accurately describe this lakefront lot. I see this more times than I care to Admit.
** If you or the owner has measured the depth behind the Dock, then state that amount in the Listing. If we are below Full Summer Pool, you can also state that, i.e.; "Dock has 13 feet of water behind the dock with Lake down 2 feet"
This is it for now. Remember, sell it like it is your own house and you can't go wrong! Thanks for Reading and Feel free to SHARE with your office.
REALTORS YOU HAVE MORE CONTROL OVER APPRAISALS THAN YOU THINK! READ ON....
Appraisers.... start telling Realtors what Lenders YOU have good experiences with...It will help to weed out the BAD Lenders if Realtors are more selective in who they chose to work with.
Here are steps REALTORS can take now to have an impact on the Appraisal Process.
The LENDER you choose can and DOES have an impact, now more than ever on how the Appraisal will go. You have significant Power over what Lender the Buyer chooses and these are the 4 questions you need to ask every lender before you refer business their way.
1.Will the Lender use an AMC (Appraisal Management Company) if so...Buyer Beware! They are notorious for underpaying their Appraisers,requesting unreasonable turn times for Reports, yet the entire process is slowed down from Appraisal Request to final delivery to their Lender Client when an AMC is involved.
** I believe that You get what you pay for and if Appraisers are paid below Reasonable & Customary Rates, their report will likely not be top notch **
2.Does the Lender have In-House Appraisal Ordering and/or In-House Underwriting...If not Buyer Beware. Precious time is saved by the in house process but more importantly, in most cases, these Lenders do not continually ask for dozens of revisions to the Appraisal Report, resulting in further delays and resulting in Appraisers being Conservative just to Fly UNDER the Review Radar. Not what you want!
3. Does the Lender use as part of their Review process, Fannie Mae's CU (Collateral Underwriter). If so ask them what weight they will place on CU. If alot...this is a Red Flag. Why? Because CU will force yet more revision requests and explanations from the Appraiser, including review of and inclusions of yet more comparable sales (increasing Appraisal Fees to the Buyer), further delaying the process and further forcing Appraisers to remain CONSERVATIVE on their appraised values to fly under CU radar. FANNIE MAE has already put Appraisers on notice that if they find things in their report that are not consistent with other Appraisers in the area or not consistent with their own past reports, they will be put on a Warning List and Finally if it continues a DO NOT USE LIST. That means the Appraiser is out of work essentially.
Appraisers are not at all happy and are running scared of Fannie Mae CU.Some fears are warranted while others are not,but the reality is, it is here to stay. They provide Lenders with CU review information but they are NOT providing Appraisers with this Review process to run their appraisals through before delivery to the client. This process would at least let the Appraiser see if there are any issues with report upfront and they can EXPLAIN why they did what they did at that point, instead of after it is delivered to the Client.
Many Appraisers also question being compared against the masses of other Appraisers. They could be the only one that gets it right, but if the masses say one thing and the one who got it right says something else, they will be held to the mediocre standard of the masses. Many issues come to play with CU and most will be unintended consequences.
4. Does the lender have a pool of Appraisers that are familiar with the areas they serve.This is very important as you well know.Some Realtors are placing in their Sales Contract that the Appraiser must be knowledgeable of the area or the special property...Such as Lakefront or Acreage or Golf Course homes and if not they want another Appraiser Assigned to the Case. Fannie Mae Requires of Lenders to obtain Appraisers who are knowledgeable of the area or they MUST acquire that knowledge.
** What I am NOT suggesting or inferring in any way is that if you pick the "Right" Lender the Appraised values will always support the Sales price...not at all! We do not want to go back to that unhappy place where Appraisers were pressured every step of the way to hit a number and we all know what happened in the market just a few short years ago....Let us not have short term memories on that time period.
What I AM suggesting is that you use a Lender who has a good pool of EXPERIENCED Appraisers and a Lender who Allows the Appraisers to use their years of education and ongoing experience to provide them with the True Market value for the Subject property and NOT second guess the Appraiser's knowledge every step of the way. All this does is undermine the Appraiser and then the Appraiser decides they are going to remain Conservative and deals will likely fall apart. Not a good thing!
So you have a home with an addition. Was it Permitted by the County?
How will the lack of a building permit affect the Appraisal and The Home's Value?
You will be happy to know that they are NOT required by HUD or for Conventional Loans....However.....there is a caveat.
When the Appraiser inspects the home, if the addition or finished basement or enclosed Garage, etc. has not been completed in a Workmanlike, Professional Manner this condition WILL be noted in the report. Then it is up to the Underwriter to determine if further inspections or investigations into the addition or finish work is required OR if they will decline the Loan all together.
So what does Workmanlike mean to an Appraiser? It means the addition must blend or flow well with the remainder of the home and it must not look "thrown together" or finished off in an inferior way, with inferior materials or with an inferior foundation, etc. As a Realtor, you KNOW what I am talking about. If you think the addition or finish work is marginal or sub-standard, so will the Appraiser.
One IMPORTANT thing to note, MOST Appraisers will NOT inquire about Permits for Finished Basements or Bonus Rooms over Garages. It is quite common for Homeowners to Finish these areas without getting a Building Permit, even though many Counties require one whenever Plumbing or Electrical work is involved. Some Counties require permits for Decks and Fences and again, most appraisers will not even ask if a Permit has been pulled for this type of addition. Some will not ask about permits for enclosed Garages, it depends upon how it was finished off and how it compares in quality and condition to the rest of the home.
The work should conform to building codes and standards in place at the time of the addition or finish work. Since Appraisers are not building inspectors and do not have the building codes handy they will typically include a disclaimer in the appraisal report stating there was an addition, it has been completed in a workmanlike, professional manner and it is assumed that the work conforms to all current building codes and standards at the time of the addition. Then we will supply plenty of photos for the Lender to Review.
If you have any questions about Building Permits and additions, contact me and we can help.
** CHECK OUT LINKS TO THE LEFT OF THIS ARTICLE FOR HALL & FORSYTH COUNTY BUILDING PERMIT REQUIREMENTS .
Even with everything the Internet has to offer by allowing You to "LOOK" at thousands of homes online...Do yourself a FAVOR and Hire A Realtor!
As the saying goes...."KEEP CALM & LET A REALTOR HANDLE IT" WHY? I'll give you 10 reasons why.....
1. You need someone to run interference when it comes time for the Appraiser to Appraise your home. Your Realtor can provide the Appraiser with the Comparable sales they used in order determined a proper listing price. This can be invaluable especially if the appraiser is not familiar with your neighborhood.
2. Your Listing Realtor is worth their Commission and weight in Gold during the most crucial time.....Contract to Closing. Many deals fall apart during this time and your Realtor is the one who has to run interference with the Loan Officer, Inspector, Appraiser, Buyer's Realtor, Closing Attorney, etc. There are so many things that they handle behind the scenes that you are not aware of in order to make sure that everyone gets to that CLOSING TABLE!
3. Your Buyer's Realtor is also worth their Salt as they make sure that you are not overpaying for a home, by telling you if the listing price seems high. They are the ones who have to negotiate an offer with the Listing Realtor, who then presents to the Seller. Realtors who have good negotiation skills can make or break a deal on your next dream home.
4. Your Realtor is a WEALTH of information on service providers. They can provide you with names of contractors from painters, roofers, inspectors, appraisers, landscapers, electricians, plumbers, HVAC Installers, Septic Repairman, Termite Inspectors, etc. Just think if you had to figure out which ones were the best and would not SCAM you! Your Realtor already knows which ones are the best for your needs as they have first hand experience with all of them.
5. Realtors make sure that as a Seller you are not doing anything that could land you in Jail, such as proper disclosure issues, complying with any State Regulations as a Seller, etc.
6. As a Buyer your access to Listed Homes is thru a Realtor. You cannot gain access any other way. Without Realtors you limit your buying experience to FOR Sale By Owners and they are not obligated to use Sales Contracts and Disclosure Forms that are there to protect you as a Buyer. This is critical!
7. Realtors act as buffers between buyers and sellers. Most people find it difficult to negotiate deals face to face when it comes to buying and selling a home. You may do yourself a disservice by not having a Realtor negotiate for you.
8. Your Realtor can be invaluable when you are working deals from out of State. They know the area in which you want to buy and You do not. They can help you find just what you are looking for without worry of the unknown such as Neighborhoods, Schools, Shopping, Places of Worship, etc.
9. Realtors keep your information Confidential. They are looking out for your best interests at all times and are focused on finding exactly what you are looking for in a home.
10. Realtor Networking, Advertising and Marketing far exceeds anything a For Sale By Owner can reach in the way of potential buyers.
Finally....Realtors are there for you AFTER the sale. Many times questions come up after you are in your new home and your Realtor is there to help you or hook you up with someone who can help you.
Required repairs are limited to those necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants
This essentially covers FHA Appraisal requirements. Of course for ALL Loans not just FHA, ALL utilities must be on INTO The home prior to the Appraiser inspecting the property or it will be conditioned in the appraisal report.