House Appraisal Types

From EnlightenMe.com

Getting a house appraisal is an important step in any mortgage, refinance or equity loan. Without knowing the value of the property, your lender is unable to determine how much they can lend you without incurring additional risk. Even though your lender may not specify which type of appraisal they want for your property, it’s important for you to know the difference, especially when the appraisal is lower than it should be.

Tax Appraisal

Of all the house appraisal types available, the tax appraisal is typically the lowest value. Instead of ordering a time-consuming or costly alternative, your lender will pull the value your county has on file for your property taxes. If that value is high enough to get the loan you want, they go no further in the appraisal process.

Market Comparison

The second house appraisal level is the market comparison. For this appraisal, your lender already knows your tax value is insufficient for the loan and they seek the opinion of an appraiser based on home sales in your area. Often, no one will come to your home, but instead performs a search of homes in your area. They compile the value of comparable homes and average what they sold for in recent months. While this doesn’t take into account any special upgrades in your home, it is often higher than the tax rolls and doesn’t cost as much as a more in-depth appraisal.

Drive-By Appraisal

A drive-by house appraisal works exactly the way it sounds. Your appraiser will review market comparisons and tax value, but also makes a trip to your property. Usually, the appraiser gets out of the car and takes pictures of numerous angles of your property, noting any backyard improvements or extensive landscaping. The condition of your neighbor’s homes may be noted and can affect your final value.

Limited and Full Walkthrough

For these house appraisals, your appraiser will schedule a time with you to enter your home. In a limited walkthrough, they take pictures of the interior and look for interior upgrades. New carpet and paint are not a primary concern, but this is your opportunity to discuss upgraded ventilation systems, kitchen remodels or room additions.

In the full walkthrough house appraisal, the appraiser does everything they do during the limited walkthrough, but they also take measurements. This allows them to provide your lender with an additional value based on your square footage. In some cases, they go as far as to assign different values per square foot to certain rooms of the house with upgrades, providing the most accurate appraisal for the lender.