How to Find a Reputable Appraiser and Get a Home Valuation

An online valuation is just an algorithm. It’s very basic and may be ZIP code-driven — it might not even be community-specific. A computer doesn’t take into account the extra analyses performed by an agent or appraiser.

How to get a value on your home

If you’re selling, a real estate agent can provide a solid valuation. But if you need an accurate home value, it’s usually a good idea to contact a qualified appraiser. Here are the common ways you can determine your home’s value:

Use an app or an online home value estimator

Many apps and online tools provide an estimated value for your home. They use an algorithm that evaluates market data, multiple listing service (MLS) transactions, and information specific to your home and neighborhood to determine value estimates.

Some of these platforms claim a high accuracy rate with a median error of 1.9% to 6.9%, citing a higher accuracy rate for homes that are on the market than for homes that are not currently on the market.

Let’s look at a real-life example:

• One home estimator app values your home at $378,600 with a range of $360,000 to $398,000.
• Another estimates your home value at $333,200 flat.
• Yet another estimates your home value at $384,744 with an estimated offer range of $323,000 to $404,000.

An online valuation estimator will also provide you with an approximate value of your home. By answering a few simple questions about your home, you can get a free online estimate in minutes.

HomeLight’s home value estimator requests basic property information and uses an algorithm that analyzes millions of transactions to predict your home’s worth.

Let’s look at that real-life example again using HomeLight’s Home Value Estimator:

Compared to the values determined by the three apps, HomeLight provides an instant estimate of $370,000 and then follows up by emailing you with a more specific estimate of $369,946.

The downside of using an online home value estimator

Online valuations aren’t designed to replace an appraisal. An online valuation of your home can be inaccurate. HomeLight estimates the values the tools provide are within 7% of the home’s actual value 50% of the time.

Online valuations don’t have the human factor. The thing about online valuations is that no human has come out to assess your home. A real estate agent or appraiser will know the neighborhood and local market conditions, as well as what buyers love in a home like yours.

“An online valuation is just an algorithm. It’s very basic and may be ZIP code-driven — it might not even be community-specific. A computer doesn’t take into account the extra analyses performed by an agent or appraiser,” LoCicero says.

“For example, does the house back up to a school or power lines? Is it in an area where car headlights are constantly shining in your living room? Maybe it has a community pool. Those kinds of things that add or detract value from your home,” he adds.

An algorithm also doesn’t factor in upgrades to your home that an agent or appraiser considers in their valuation. For example, you may have bolstered the value of your home by replacing your roof or upgrading your kitchen by installing stainless steel appliances.

Request a CMA from a real estate agent

An online value estimator is the starting point for estimating your home value, but a comparative market analysis (CMA) provides a better picture. Many agents provide a CMA for free.

A CMA brings the human element into estimating the value of your home. A real estate agent can assign a dollar amount to each difference between your home and comparable properties. Local professionals especially know what’s trending in your specific market. They adjust for upgrades, special features like a community park within walking distance, and external factors, such as a nearby road that brings traffic noise into the living environment.

Although a CMA is an informal valuation of your home, it must be reliable. If the report is too far off target, the state’s real estate licensing commission may take disciplinary action against the agent.

Get an appraisal valuation from a licensed appraiser

If you need an official and accurate value on your home for any reason, you’ll need to get it from a licensed or certified appraiser. A local appraiser knows the market and will evaluate your home’s location and adjust the valuation considering any upgrades, features, and drawbacks of your home (or the community).

An appraisal costs approximately $400 to $699 and may take 11 calendar days.

What to look for in an appraiser

The appraiser you hire must meet the following requirements:

• Be an indifferent third party: This means the appraiser is not a friend, family member, or colleague of any interested parties, including the seller or the buyer, and does not hold any interest in the property.
• Be a qualified appraiser: Depending on state laws, the appraiser must have an associate degree or a bachelor’s degree in any field, 12 to 18 months of experience apprenticing under a licensed appraiser, and an appraiser certificate or license.

What to ask an appraiser before hiring

When choosing an appraiser to value your home, asking the right questions is important to make sure you’re working with a qualified professional who delivers reliable services. Here are some crucial questions to ask before hiring:

• How do you determine my home’s value?
  This question helps you better understand the process of valuing your home, as the professional talks about their methodology, specifically the factors they consider.
• Are you familiar with my local market?
  An appraiser with local knowledge offers a more accurate valuation, as they are well aware of neighborhood trends and property values.
• What is your turnaround time for the appraisal report?
  This is especially important if you’re looking at selling your home quickly. With a timeline estimate, you can plan sale logistics accordingly.
• Can you provide references from recent clients?
  Asking for references allows you to evaluate the appraiser’s reliability and customer service.

What to expect from the appraisal process

During the appraisal process, the appraiser will evaluate the community, comparable properties, and your property to determine the value of your home. The appraisal process includes:

• Researching the property, its history, location, neighborhood, and external influences on the property
• Visual evaluation of the home’s age, size, condition, improvements, and features
• Comparison of similar home sales in the area
• Numerical calculations of value

What’s in an appraisal report

Your appraisal report will be a physical or digital statement of the value of your home and how the appraiser determined the value, usually provided through the Uniform Residential Appraisal Report. It includes:

• The appraisal form
• Your home’s exterior and interior conditions
• The home and property’s size or square footage
• The value of living areas

What to tell your appraiser

The appraiser is not an inspector. They’re not there to determine what repairs need to be made. Nonetheless, they are evaluating the condition of your home.

To get the best value on your home, provide an appraiser with a list of recent repairs or updates to your home and the cost and date of each repair.

An estimate is fine, but it’s better if you have receipts. In particular, it’s important to list repairs or updates that the appraiser cannot see, such as blown-in insulation, a new HVAC system, or a repair to a leaking roof that left watermarks on the ceiling.

What not to tell your appraiser

Keep in mind that the appraisal must be impartial. The appraiser cannot value your home to meet your financial needs. This means you should not ask the appraiser to value your home at the sales price, work a little magic on the value, or tell the appraiser about any hardships you’re going through. Also, don’t give the appraiser reasons why you might expect the home to appraise low.

Tools to find a licensed local appraiser

You can find an appraiser through a Google search using the phrase “appraisers near me.” If you do this, check the appraiser’s experience, qualifications, and reviews before reaching out. But if you want the peace of mind that the appraiser you hire is qualified, reputable, and has years of experience in your area, consider these options:

• Request a referral from a local real estate agent. This is a great way to locate a known, reputable, licensed appraiser near you.
• Get a referral from your lender. Your mortgage company has an appraisal management company (AMC) on speed dial. The AMC is an indifferent third party that acts as a buffer between the lender and the appraiser to ensure the appraisal is impartial. Your lender can provide you with contact information for the AMC, which can refer you to a local appraiser.
• Use AppraisalInstitute.org. To find a licensed appraiser who will determine the value of your home, Appraisal Institute can put you in touch with a fully vetted appraiser who meets rigorous criteria.
• Use Appraisers.org. This site is maintained by the American Society of Appraisers, a non-profit, international organization of professional appraisers. Its online tool lets you search for appraisers by location and appraisal expertise.
• Use Thumbtack or Angi. Thumbtack provides appraiser profiles, reviews, and costs. Angi will ask a few questions about your project, get your contact details, and provide info to local appraisers, who will send you more information.

Keep in mind: a lender or buyer will hire an appraiser

If you’re already in the process of selling your home and have signed a contract with a buyer, you’re not on the hook to hire or pay an appraiser. The buyer’s lender will hire an appraiser.

Likewise, if you’re selling for cash and the buyer wants an appraisal, the buyer will hire an appraiser. In this event, the buyer pays the appraisal fees.

Bottom line

If you’re looking for a quick and approximate value of your home, HomeLight’s online value estimator is a great place to start. If you need a better valuation on your home, a real estate agent may be willing to provide a comparable market analysis free of charge.

However, if you need an accurate home valuation, you must hire a licensed appraiser. Make the search easier by getting a referral from a local real estate agent or your lender. Additionally, search tools provided by sites like the Appraisal Institute, American Society of Appraisers, Thumbtack, or Angi can help you.

Header Image Source: (Dillon Wanner / Unsplash)