Featured Stories

Other Pamplin Media Group sites


Selling? Get ready for appraisal, inspection

Finding your home's worth — and its potential problems — are key steps to a smooth sale


When you are getting ready to sell your home, dealing with inspections and appraisals is part of the process. Your home is now a product that is being sold and needs to be evaluated. Many people think appraisals and inspections are essentially the same thing, but there are some key differences.

If you’ve ever watched “Antiques Roadshow” on PBS, you’re already familiar with the concept of an appraisal on personal property. The idea is similar in the realm of real estate valuations. Each property is unique, and the appraiser relies on his or her general expertise and specific research to arrive at an opinion of value.

An appraisal provides valuable information for the buyer and the seller, but the appraiser’s primary mission is to protect the lender. Lenders don’t want to own overpriced property and that’s why the appraisal takes place before the lender grants final approval of the buyer’s loan.

The appraisal process

Appraisers use a variety of factors in their decision making. They weigh the location of the home, its proximity to desirable schools and other public facilities, the size of the lot, the size and condition of the home itself and recent sales prices of comparable properties, among other factors. Appraisers aren’t interested in whether or not the house is clean, but they do notice signs of neglect such as cracked walls, chipped paint, broken windows, torn carpets, damaged flooring and inoperable appliances.

Federal law requires states to establish minimum standards and licensing practices for real estate appraisers. In Oregon, trainees must take at least 200 hours of classroom courses, pass an examination and have 2,500 hours of appraisal experience.

If the buyer is applying for a mortgage that will be insured by the Federal Housing Administration (FHA), the appraiser must survey the physical condition of the home and disclose potential problems to the buyer. No such obligation exists for non-FHA mortgages.

If a home receives an appraisal lower than the purchase price, there are some ways the purchase can still go through. The seller can reduce the purchase price, the buyer could make a bigger downpayment, or if it’s a question of needed repairs, a separate escrow account can be set up to fund those repairs.

How an appraisal differs

from an inspection

An appraisal isn’t a substitute for a professional home inspection. In fact,they have some key differences. The appraiser formulates an opinion of the property’s value for the lender, while the inspector educates the buyer about the condition of the home and its major components. The appraiser is primarily focused on the value of the home whereas the inspector keys in on the home’s condition with an eye toward existing and potential future problems.



Local Weather

Cloudy

50°F

Forest Grove

Cloudy

Humidity: 96%

Wind: 3 mph

  • 1 Oct 2014

    Partly Cloudy 66°F 47°F

  • 2 Oct 2014

    Partly Cloudy 73°F 49°F