Sharing some helpful reminders and things to keep in mind regarding home appraisals. This information is from Carey Ann Cyr, a CMG Financial Mortgage Loan Officer in Nashville, TN.

• An appraisal is an unbiased professional opinion of a home’s value and is used whenever a mortgage is involved in buying, refinancing, or selling that property.
• An appraisal is just an opinion of one.
• A common formula some agents use is to take the average dollar per square foot and multiply that per exact square footage of the home in question. This is not an accurate appraisal calculation.
• An appraiser can not use listings or upcoming sales for comps so if you know of a house that would be a perfect comp and is closing soon, we recommend waiting for the appraisal to be done after it closes in order to maximize value.
• Just because the appraisal comes back at a value doesn’t mean it is completely accurate until underwriting reviews. We’re seeing many coming in that have had the values pushed.
• Appraisals are now audited by the agency’s artificial intelligence and lenders are forced to require the appraiser to address any comps not used that the agency feels are stronger.
• Any square footage below ground is automatically valued differently.
• The cost of the appraisals are mainly dictated by the appraisers. Each charges a different price and it changes based on complexity of the home and how quickly the lender needs it by.
• All lenders are looking for health and safety so some minor repairs would need to be completed if they are a health & safety concern.
• A rebuttal is allowed but agents should have a strong comps prepared early so the process goes smoothly.
• Appraisers are human and do make mistakes but most want to make it right and understand they’re an important piece of the pie when it comes to getting a home mortgage.
• Conforming lenders have to use an AMC which can be a third party or one they own. An AMC chooses the appraiser through a lottery system to keep it fair and compliant
• FHA/USDA loans require a government certified appraiser and VA loans require us to use the VA Appraiser panel that is on the VA portal
• There are 3 types of Appraisals – Desktop, DriveBy and Full Appraisal. The loan and ltv determines what appraisal type the lender will order.
• All borrowers are required on conforming loans to receive the appraisal 3 business days prior to close or they need to sign a waiver.

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