Setting value
What to know before getting your home appraised
There is a whole cast of players when it comes to buying property: the buyer’s agent, the seller’s agent, the mortgage broker, the lawyer, the inspector, the appraiser...
Wait, what does an appraiser do again?
Home appraisers are likely to spend the least amount of time in a house, but their opinion heavily influences the deal. An appraiser’s job is to give their personal opinion of its value. They don’t test the sink, they note how new it is; they don’t look for mold in the attic, they measure the space’s size; they don’t judge the cleanliness of your grout, they notice if the flooring is tile, wood or carpet.
“The first job is to measure the house to determine the gross living area, then we take pictures and notes for finishes, type of heating, flooring, siding, windows,” said Sam Gamello of Olde Kinderhook Appraisal Service. “We take notes on the quality and condition, whether there’s deferred maintenance, if the kitchen and bathrooms are updated, if there are the proper number of smoke detectors. We’re not home inspectors. We don’t move boxes or furniture. It’s what we can see as we walk through the home.”
The second part of an appraiser’s job is market research. It’s not unlike a real estate agent looking at similar homes when she’s coming up with a price for a listing. Appraisers look through the local multiple listing service and choose the most similar properties in a small area. For example, if an appraiser is evaluating a home in Wilton, they will look at sales in Greenfield, the northern part of Saratoga Springs and the western edge of the Schuylerville school district. They do not compare houses in Albany to houses in Troy.
An easy example is a condo in a development, where the square footage, number of bedrooms and bathrooms are the same. Unless one unit has gold-plated toilets and a new designer kitchen, the prices are going to be similar.
Appraisers also look for pricing trends to determine if the market is appreciating or depreciating. Appraisers are first to see changes in the market.
Home appraisers have a specific role in the industry.
What education does an appraiser need?
In order to be licensed by New York, an appraiser must have 150 hours of education in how to do the job, a bachelor’s degree, an associate’s degree in one of five specific areas or 30 semester hours of college-level courses in a specific list of classes. Appraisers must renew their licenses every two years and 28 hours of continuing education is required.
The requirements increased following the housing market collapse in 2007, but have since softened somewhat, said Scott Reale, owner of Performance Appraisals based in Rexford. They are still enough to
Ask questions or get a second opinion if you think an appraisal was done unfairly.
keep people out of the field. Most appraisers have been doing the job
for decades, Reale said.
Are home appraisers infallible?
Appraisers are also required to be fair and unbiased, but recent national news revealed Black homeowners discovered their houses were undervalued. A 2021 survey by LendingTree found that more than 1 in 5 Americans who have had to get a home appraisal — typically to refinance or sell a home — believe the value was too low at least once in their lifetime.
A survey of 2,100 consumers, including more than 900 who have commissioned a home appraisal found: “Black and LGBTQ+ homeowners are most likely to believe
their home’s value was unfairly appraised. Of those who have had a home appraisal (or multiple home appraisals), 32% of Black and 31% of LGBTQ+ homeowners believe they were low-balled, compared with 22% of white and heterosexual homeowners.”
An appraiser often does the work alone, and, although in a conventional property transaction, the lender hires the appraiser and the buyer pays the bill.
How then, does the homeowner know the appraisal was fair?
Jacob Channel, senior economic analyst for LendingTree, said to ask for details.
“If it’s low, ask what’s bringing it down,” Channel said. “It might be something you didn’t notice. Don’t be afraid to say, ‘this isn’t what I thought, can you explain why.’ If they can’t provide detail, you can look for a second opinion. If your bank won’t work with you, you can look for a lender who will.”