Home Appraisal: More Than Just House Value

Most people, when buying a home, are first given a copy of the appraisal at
the closing table. In the excitement and stress of signing the final mortgage
papers, and arranging to get the keys to the new house, the appraisal may be
tucked away with the other closing documents to be forgotten. There is
information on the report worth knowing.

The lender probably told you what the home value was soon after the appraiser
completed the appraisal. Now that you have a written copy in front of you, it
offers much detail, and tells you a lot about your home that you may not have
considered. When you get home pour some coffee, pull up a chair and look it
over.

The first several pages of the Uniform Residential Appraisal Report offer an
in depth profile of your property. The neighborhood section will reflect the
appraiser’s analysis of whether the housing trends around you are increasing
stable or declining in value. The high end and low-end prices and predominate
values are given. This may be important to you as a benchmark to think about if
you are planning to resell in the next several years.

The section on improvements is where the appraiser gets to observe the
general condition of the home. The comments could range from noting the upgrades
such as new roof, interior painting or new carpeting. The flip side would be
warning about lap siding now in good condition but subject to premature
deterioration. Any negative comments about condition may be something that could
be corrected by you to maintain or increase value.

The page on comparable sales gives you the opportunity to see the exact homes
with addresses that your home was rated against. You will read how the appraiser
made the adjustments to each home’s value relating to square footage, rooms,
garage, lot size and a number of other line items to come to a bottom line.
There may be a page called "location map" that will have arrows showing
where each of the comparable homes are located. You could take a little time and
go for a leisurely drive to check out the curb appeal of each of the homes.

These are just some of the highlights of the appraisal. In the back pages
there will be photos of the home and likely photos of the comparable homes. The
appraiser will go into more depth relating to the neighborhood description,
additional features of the subject home and how the sales comparisons were
analyzed. There should be a page reflecting the floor plan of your home as
measured by the appraiser. In addition to the diagrams, there will be the
calculations for total area a breakdown of each foot of living area. The
appraisal will be a fairly complete picture of your home and will give you a
sense of what a financial asset you really have.

Bill Wehr publishes useful articles about mortgages at http://www.mortgagejourney.com
Bill is the owner of Great Pacific Northwest Mortgage, a residential mortgage
company serving Oregon and Washington. If you are buying or refinancing property
in Oregon or Washington & need mortgage information please call Bill, or
complete a secure on-line application at http://www.portlandoregonmortgages.com.