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Beginning The Appraisal

I'll go through the appraisal process. You can modify it to meet your own needs or desires. You'll be nervous for the first ten or so appraisals. This is normal. Just remember that you need to learn this material well enough, and keep up to date with all the new real estate and construction trends. If you do then you will earn the respect of the client and all third parties to the transaction by being so knowledgeable.

On your way to the subject property you should drive around the area before you get there. This will enable you to get a feel for the neighborhood. Take a good look around the neighborhood to see what condition and style the houses are in. See if there are any recreational facilities, such as, parks and playgrounds nearby. Check for the distance to any local transportation, shopping and employment centers. What are the negative and positive aspects of living in this area? Etc. Take note of the condition of the exterior of the house or condo, the terrain, if there are any ponds or streams, etc. Mark down the time the on-site appraisal work begins and ends. Mark down the weather conditions. Any snow covered areas will not be visible for inspection. Rain may have signs, or lack of signs, of water in the lower level and any roof leaks.

Greet the owner and Realtor and just tell them you have to ask some questions about the house or condo to get some background. You need this info to help you with the report and the appraisal. There are some aspects of the house that you can't always detect or verify without some additional information from the seller or Realtor. Often you'll find that you can't get all the information you need from the questions you ask the owner or Realtor. Just get whatever information you can and keep a record of it. Make sure that you put their answers in the written report to CYA, which stands for Cover Your Assets (or Cover Your Ass). This will help in the event that you find out later that someone misrepresented the house or condo. You'll be able to show proof about what was stated and represented to you and your client at the time of the appraisal. This is why you want to stress to the client to arrange the on‑site work at a time when the owner of the house is home. It's important to tell your client this when you're booking the appraisal. This way they'll have time to notify the owner to arrange the appointment. You should also get a copy of any real estate listing sheets, surveys, etc. that the third parties might have. See if there's anything important in these documents to help you or your client.

You have to be very gentle when you ask the seller of the house the following questions. Sometimes they get very upset and worried about all these questions. Just tell them that it's nothing personal or that you don't trust them, you just need this information to assist you with the appraisal. There are many aspects about a house that only the owner may know about and that's what you're trying to find out. If they (the seller) were buying the house, they'd want you to find out the same information from the seller as well. Just remember that you're a guest in someone else's house! So don't be rude or get into an argument with anyone at the inspection site. You have to always be very diplomatic and professional in this or any other business if you want to be successful.

When you ask these preinspection questions, make sure that you ask the owner or Realtor about information from any PRIOR owners of the house. Meaning that if the seller tells you, "No, we have never made any changes to the foundation or septic system," then ask them if they know of any prior owners having made any changes, repairs, etc.

Real Estate Advice Education House Inspection Appraisal Home Improvement Renovation When you ask these preinspection questions, make sure that you ask the owner or Realtor about information from any PRIOR owners of the house. Meaning that if the seller tells you, "No, we have never made any changes to the foundation or septic system," then ask them if they know of any prior owners having made any changes, repairs, etc. The reason you need to specifically ask that is because if you don't, then often the third parties will never mention any details they know about it. The Realtor, seller or seller's attorney may have information about what repairs, updating, problems there are/were with the house when the prior owners lived there. For example, the seller may have found problems in the house or with town hall records concerning the subject property after they moved in that were created or occurred with the prior owners. Third parties will rarely volunteer that type of information when you inspect the home for an appraisal client. They may not be trying to hide the information from you and they may think it's not relevant anymore because the situation occurred with a prior owner in the past. However, you need to make the third parties and your client aware that "yes" it is very relevant that you know all the details possible for your appraisal and evaluation of the subject property.

  • Some of the questions to ask:
  • Age of House/Condo

  • How long they lived there

  • Any damaged areas to the floors, walls, and/or ceilings that they know about. Are any damaged areas hidden by carpets, furniture, sheetrock, etc.

  • Any insulation added or removed to the floors, walls, and/or ceilings. Any UFFI foam or asbestos insulation removed must have licensed EPA contractor certification.

  • Any past or present problems with radon, mold or any other environmental or health hazards. Has the house or site ever been tested for any environmental hazards.

  • Any past or present problems with the water pressure and drainage.

  • Any past or present problems with electrical overloads, outlets, switches, etc.

  • Does the fireplace draft properly and how often do they use it (if applicable).

  • Any exterior siding added after the original construction. What's behind it.

  • Roof age and any past or present leaks.

  • Any decks or additions added. If yes, are all valid permits, approvals and Certificate of Occupancies, (C of O) filed at town hall.

  • Any structural renovations done. If yes, is there a C of O for the work done.

  • Furnace/Boiler Age. Dates and how often serviced. Are all rooms heated. Any oil tanks, used or unused, and their location. The age of any oil tanks.

  • Age of the air-conditioning compressor. If it's too cold to test, did it operate properly last season. Dates and how often the system was serviced.

  • Have they ever treated for termites or wood destroying insects. Date treated. Any damage from wood destroying insects, (WDI). Any guarantees or documentation for any treatments performed.

  • Any sump pumps in the house. Any water problems.

  • Is house/condo connected to Municipal water and sewer systems. This is very important to get from them since there is no way to determine this at the site without checking the town hall records.

  • Septic System:
  • Any survey or plot plan showing the system.

  • Any renovations or additions to the house that need septic system approvals, such as bathrooms added.

  • Construction and size of septic tank.

  • Is the tank original or was it upgraded.

  • Date the tank was last pumped out and the times prior to this cleaning.

  • Name of the septic service company for more info.

  • Well Water System:
  • Any survey or plot plan showing the system.

  • Depth of the well.

  • Is the well water pressure and volume adequate for normal use.

  • Date the well pump was last serviced or replaced.

  • Date the well water storage tank was last serviced and the age of the tank.

  • Name of the well service company for more info.

  • Swimming Pool:
  • Age of the pool, filter, heater and liner.

  • Do they have a Certificate of Occupancy and all valid permits.

  • Any known leaks in the pool walls.

  • Has it been properly winterized (if applicable).

  • Name of the pool service company for more info.

  • Are there any outstanding building, zoning or other violations or any missing permits and/or approvals.

  • Can I test all operating systems in the house or are there any that are being repaired or aren't functioning properly. Operating Systems refers to items such as the heating, air-conditioning, plumbing, electrical, wells, septics, etc.

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