This home has some structural issues and an appraiser can easily come to a conclusion of value without bringing in other professionals. However, it is not always this easy for the appraiser.
Real estate appraisers are not home inspectors. Appraisers look at homes from the standpoint of an informed buyer or seller, then analyze the marketability issues of a property and come to an opinion of value that is consistent with the scope of work for the assignment. This means that an appraiser should recognize when potential structural issues require scrutiny by other professionals to help develop a credible opinion of value.
One area that can be difficult for appraisers is recognizing foundation problems. Here is a list of signs that might signal that a structural inspection is necessary:
1. Cracks in the Foundation: Small cracks in home foundations are common. Larger cracks that grow over time are more alarming. The most severe cracks are stair step in shape or get larger on one end.
2. Walls that Bulge: A wall that is not plumb up and down may signal settling.
3. Jammed Doors: Doors that do not open and close well, especially in areas that are suspected of structural movement, could be a sign of a subsided foundation.
4. Sloping Floors: Sloping floors can signal that the foundation has shifted. However, this is not always the case. I once inspected a house that had floors so badly sloped that it made me uncomfortable to stand. When I questioned the homeowners about this, they provided me with a recent engineer’s report showing that the home had no structural problems. Once I had that report, I knew the sloping floor was only a marketability issue of buyer preference (for a level floor) and not a lack of structural soundness.
5. Cracks in Sheetrock: Cracks in sheetrock are common, but are most alarming when they are vertical between a door and ceiling or where separation occurs between the ceiling and the wall.
If an appraiser is inspecting a home with one or more of these foundation issues, it may be time to call in an expert. A structural technician will provide the necessary information so that the appraiser can form an accurate opinion of value.
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In Portland, OR and everywhere, homeowners are often anxious about having an appraiser view their home. I also do not like to invite strangers to walk through my house. The experience can feel like an invasion of privacy, and homeowners often feel nervous about the appraiser finding a problem that affects the value of the property. Home value has real-life consequences when the appraisal is for lending, sale, estate settlement, taxes, divorce, or bankruptcy. Sometimes knowing what to expect from the appraiser can relieve some anxiety about the appraisal process.
It is important to understand that no matter what embarrassing thing you might have in your home, the appraiser has probably seen it before. The appraiser does not care if you have some dirty dishes in the sink or a pile of laundry. The appraiser is only interested in the condition, quality, features, and other marketability influences of the property. Just remember that too much clutter could keep the appraiser from seeing the true condition of the property because the appraiser is viewing your home thru the eyes of the typical buyer. Appraisers and buyers are human. Consequently, it could help to tidy up a little before the appraiser comes.
The purpose of the appraisal inspection is to gather sufficient information about the subject property so that the appraiser can make reasonable comparisons with other properties and come to a credible opinion of value. For some appraisals, the appraiser may not inspect the property. For other appraisals, the appraiser might just drive by the property. However, in most home appraisals the appraiser performs an on-site viewing of the subject property.
A typical on-site home appraisal viewing includes the following:
1. Measurement of the exterior to determine the finished and unfinished areas of the home.
2. Photo documentation of exterior sides, street, and possible view.
3. A walk-thru of all interior rooms and outbuildings.
4. Photo documentation of important interior rooms like kitchen, baths, and living rooms.
5. The appraiser will likely ask questions about what types of updates have been made to the property and the age of those updates.
6. The appraiser may turn on lights, furnace, or water. Depending on intended use, the appraiser may also peek in the attic or crawl space. However, it is important to recognize that the appraiser is not a home inspector. Based on what is observed, the appraiser may recommend further inspections or base the appraisal on assumptions about the true condition of the property.