An appraisal is not always an accurate guide to
the market value of a home.
For a refinance, the appraiser doesn’t have a sales price to use as a baseline. To determine value, the appraiser uses recent sales of homes that the appraiser feels are comparable, as well as currently listed but not yet sold homes, to determine a final value. The primary drivers for the determination of a useful comparable are room count, square footage, and location.
If you feel that your home has amenities that add value and distinguish it from similar homes in the area, pass that information along when the appraiser comes to inspect your home.
Two important factors to know about appraisals:
If you feel that your property has been appraised for less than it is worth, and it is affecting your ability to get a loan, your lender may be able to work with the appraisal management company on getting the appraisal corrected. However, this is much more difficult than it was in the past. Sometimes the only way to get an increase in appraised value is to get a new appraisal. However, with the new regulations this can only be done by switching lenders—and, this doesn’t always work.
In a situation where you need an appraisal that is not for a refinance or a purchase—a divorce, probate, or some other financial settlement—you may not want to rely on an appraisal obtained by another party. Appraisals always have a degree of subjectivity, and if you want to be sure you are being treated fairly, get your own appraisal done.
Although a licensed appraiser can be found online, it is better to get a referral from a real estate agent or lender. If you contact me, I will refer you to an appraiser I have experience with who works in your area. To check the qualifications of an appraiser you are working with, you can visit the website of the California Office of Real Estate Appraisers.