APPRAISALS IN TODAY'S MARKET
- by Mark Moore
Appraisals are interesting right now! We just hosted a great lunch and learn at the Sandy Springs office, and here are a few key takeaways.
1. With so many homes not making it into FMLS or MLS, one of the most important things you can provide to an appraiser is any recent sales that were not in the MLS/FMLS system that have closed or are scheduled to close. They need two sources of data to verify.
2. Appraisers have to “bracket the subject property”. One higher priced, one lower priced. One slightly larger, one slightly smaller. It’s very hard to do with the rate homes have been appreciating.
3. If you are providing comps, they need to be recent (last 3 months), close to subject property, and similar in size, design, finish, etc.
4. Gross living area (GLA) is one of the most important factors to an appraisal. Area below grade (even if daylight on 3 sides) is not allowed to be counted in the GLA of a home. Ideally, the appraiser would find a comp with similar above and below grade square footage. But they can’t comp a 5000 s/f home with 2500ft in a basement, to a 5000 s/f home on a slab where all the living area is above grade.
5. There is a difference in quality of appraisers. Be sure your lender is using top quality appraisers; it will save your clients and you much stress and work!
We are happy to answer any further questions from any of you who could not attend! J Just email or call us!
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