Having an appraisal done before buying or selling a property is always crucial. As an essential aspect of the loan approval process, an appraisal is usually carried out by a home appraiser on behalf of your loan provider or mortgage company in order to figure out the true value of the home you wish to buy.
Based on the assessment, the appraiser writes and submits a report to the lender for further process or final approval of the loan, which typically takes about 3 to 5 days (let’s say a week).
Upon investigation, the lender also reserves the right to change the estimated cost of a property so as to get to an accurate market value.
Although mandatory in all states, an appraisal process may vary depending upon the type of loan you’ve applied for.
In this post, we’ll take a closer look at the home appraisal process in the famous resort city of Gulf Shores in Baldwin County, Alabama. But before that, let’s quickly understand the process.
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What is a home appraisal?
A home appraisal process is all about evaluating a property so as to find its actual value. But unlike inspection, which determines the physical condition of the house, an appraisal is more about finding out the cost.
Usually performed by a certified and licensed appraiser at a fee, it involves a physical inspection of the home’s interior and exterior, measurement of the total area, and up-close evaluation of all the features and fixtures.
The appraiser also conducts thorough research by comparing the property for sale with other similar or recently sold homes in the Gulf Shores to establish a fair value. A process is better known as “comps” or “comparables.”
Now, as I said, the entire home appraisal process depends largely upon the type of loan being sought. As a result, the checklist for the same also differs. And for which you need to first get familiar with all the different types of home loans available in the Gulf Shores real estate market.
Before we jump onto that, let’s also understand certain flags that can be raised during an appraisal process regardless of the type of loan you seek.
Common Flags in a home appraisal process:
- Damp, sunk, or unstable foundation.
- Termite/ rodent infestation.
- Additional features or installations without a permit.
- Mold.
- Damaged/ leaking roof.
- Improper electrical wiring or plumbing.
- Environmental risks.
As you can see, most of these factors can be improved and should be corrected well before your mortgage application can be approved. If not for anything, a little repair will only raise the market value of the property.
Moving on, here are the most common types of home loans and the home appraisal checklists for the same:
Conventional Loan Appraisal Checklist for Gulf Shores
- The physical condition of the home with a special focus on damage.
- State of features and fixtures such as appliances, furnaces, chimneys, air conditioning systems, water heaters, and so on.
- Size and area of the home and property.
- Curb appeal or the quality of the landscape.
- Condition of the roof and foundation.
- The number of rooms, baths, closets, doors, and windows.
- Quality of lighting and plumbing.
- Any fireplaces or hearths.
- Swimming pools and sprinklers system.
- The shape of the basement (whether finished or unfinished).
- Details of the materials used include granite, stones, tiles, woodwork, and appliances.
- Any upgrades or smart home systems.
HUD Appraisal Checklist for FHA and USDA loans in the Gulf Shores
Since both the Federal Housing Administration (FHA) and the United States Department of Agriculture (USDA) fall under the United States of Housing and Urban Development (HUD), they do follow the same guidelines as far as the home appraisal process is concerned.
Nevertheless, aside from the conventional checklist, you should also check for the following beforehand:
- Lot drainage moving out of the house, not towards it.
- Handrails along the steps and stairways.
- A solid foundation.
- Proper ventilation.
- Functioning mechanical systems
- A roof without leakage that can sustain for at least a couple of years.
- Lead-based paint should the house be built before 1978.
- Defective or unfinished paint.
- Evidence of termites.
- Damaged driveway or sidewalk.
VA Appraisal Checklist in Alabama
As a special welfare program for war veterans, home loans from the US Department of Veteran Affairs (VA) have a rather unique appraisal process, unlike any other.
For starters, a VA appraisal can only be performed by a licensed VA appraiser and not the one by the lender.
It can only be reviewed by a VA appraiser or a lender’s staff appraisal reviewer (SAR).
Instead of a written appraisal report, a VA appraisal generates a notice of value (NOV) which upon assessment is issued to the department. The NOV shows the market value of the home as well as any repairs that are needed.
VA appraisers usually tend to check the following factors before issuing an NOV:
- A heating system capable of maintaining up to 50 degrees Fahrenheit.
- A safe and sound roof that can last for a reasonable duration or a few years.
- Functional sewer system.
- Functional water heater.
- Clean drinking & tap water.
- Stable foundation.
- Serviceable utilities.
- Pest inspection
- Overaged paint (chipping, peeling, or flaking).
- Missing handrails or fencing along the staircase.
- Broken doors and windows.
- Decaying wood
- Water stains and dirt patches.
- Incomplete wiring and other electrical issues.
With information such as this at hand, I am sure you’d be in a far better position to buy a property in Gulf Shores and nearby cities.
By HomeLight Homes
