You've found the perfect house. The buyers take your offer, your loan is preapproved (no small feat nowadays) -- and now, there's just the little matter of the appraisal.
Who is this "appraiser" person who can make or break your dream?
In most cases, the appraiser is dispatched by the loan broker or mortgage company and is sent to do a survey of the property and provide an opinion as to its value. This job is different from -- and often confused with -- the home inspector, who is looking for structural and infrastructure issues that don't necessarily have a bearing on the home's value.
The depth of the survey can range from an inspection inside and out with plenty of picture-taking and measuring, in addition to some legwork around the neighborhood and the latest comparable sales, to what's known in the industry as a "drive by" or a comparative market appraisal.
"If the purchaser is buying property with a gigantic down payment, the lender may just request a cursory appraisal, which is just a quick look at the property and the comparable sales since there's not much risk in the loan," said Mike Evans, a real estate appraiser based in Chico, California.
Most transactions today are seeing more requests for full appraisals because of upheavals in the real estate market, which has created more tension in the mortgage broker/appraiser relationship. It's a conflict that's not usually seen by the consumers who are interested only in getting the house they want with a loan they can afford. But it's one that significantly affects how the real estate business is done.
"We're always getting pressure from brokers who want a property to be appraised at a certain figure to make the deal work," said Evans.
"That's the nature of the business. If the value isn't there in a property, I'm not going to make it up. But there are brokers who give their business to some poorly trained appraisers who will hit the figures the brokers need because they need the business."
A wide range of state and national appraisers associations work to encourage continuing education and certification for real estate appraisers, as well as education for the property buying public.
"We're not out here to squash your dream home," said Evans. "We're trying to help the process along."
It's possible to do a number of things that can help make the appraisal better.
"A person's attitude can make a difference. We know they want a good high price, whether they're selling it or going through a refinance," said Steve Miller, a Chicago appraiser. "It's best to be friendly, let them in, show them around, and tie up your big dogs!"
"I always say to people, there's nothing on the appraisal form that says whether you're a good housekeeper or not," said Evans. "We're not looking at furniture or judging the art on your walls. We're looking for improvements and damage."
There are little things that an appraiser picks up from experience, such as using the nose. Musty, mildew odors from closets and bathrooms can mean an expensive mold remediation project is due. And if there's a heavy whiff of cat urine, it's a sign that the carpet, no matter how new it is, is probably in need of replacement.
In some cases, the appraiser will want to take a look at the heating and/or air conditioning unit to check its condition. Make sure the area around the equipment is clear and have some flashlights available if the need arises.
Outside, take a good look at the neighboring homes. Is the landscaping on yours comparable? Does it look like the black sheep on the street? It's never too late to make sure the grass, trees and hedges are cut.