Whether you plan to sell your home as a For Sale By Owner (FSBO) or with a real estate agent’s help, you’ll need a home appraisal to help you decide your home valuation.
FSBO sellers often hire a professional appraiser before listing a home to help them crunch the numbers to determine the asking price. However, the buyer’s mortgage lender will most often require an appraisal after signing the purchase contract. The appraisal assures the lender that the home is worth the loan amount.
Why You Should Hire a Home Appraiser for Your FSBO
Investing in the appraisal early will likely save time and money during the FSBO home selling process, especially since you’re conducting the selling price research. Although it's helpful to have concrete numbers to craft your home sale, keep in mind that the buyer’s lender most likely won’t accept your appraisal and will require another with their buyer. So, while an appraisal can help justify your home sale price, it can’t be used as a part of the contract.
How to Find a Qualified Appraiser
Researching candidates avoids the potential risk of hiring an appraiser who lacks education or experience. A bad hire can lead to miscommunication and mistrust. An unskilled appraiser will ultimately produce an unsatisfactory appraisal report.
An appraiser’s reputation for fairness and unbiased evaluation will precede them, so start locally and ask friends and neighbors already in the area. Their experiences will guide you both to and from specific appraisers. If you're unable to find a reputable appraiser by word of mouth, the following two resources are helpful places to start.
- Appraisal Foundation
- Appraisal Institute
The best professionals work and live near your address, know the intimate details of the neighborhood, and have access to the MLS system. Less expensive appraisers may be available, but use caution. Their local knowledge will be limited if they come from too far away.
Questions to Ask Before Hiring an Appraiser
1. Start with the basics.
When researching, ask for their best contact numbers, license or certification number, and a list of additional qualifications.
You should know that there’s a difference between licensed and certified. Licensed refers to the least amount of appraisal education the state requires, while certified professionals have the most authorization allowed by an individual state.
You may see MAI, SRA, AI-GRS, and AI-RRS behind their name. These designations denote the amount of additional specialized instruction from the Appraisal Institute the individual has beyond the minimum requirements. If you want a breakdown of what each means, ask them directly or head to the Appraisal Institute for detailed information.
2. Where do you work?
Appraisers use the term “geographic competency” to refer to the nuanced information of the market they’re hired to work in. An appraiser’s thorough understanding of the local market is a key hiring consideration.
3. How long have you been an appraiser?
Experts suggest at least five years of experience for typical appraisals and at least ten for intricate appraisals needed for properties with a lot of acreage, waterfront, or out-of-the-norm homes.
4. Have you received any disciplinary actions?
Appraisers can be cited for multiple reasons, including engaging in cost-cutting and low-quality appraisals. Each state has an appraisal regulatory agency consumers can contact for more information.
Determining Appraisal Fees
Several factors determine the fee for residential property appraisal, which makes the fee range vary widely. Expect fees starting at about $350 and can go up to nearly $1,000 for complex research. However, the typical price for a single-family home appraisal is about $500. Factors that could add to the price include high cost-of-living areas and a large home and property.
More pricing considerations:
- Type of appraisal needed
- Data on comparable sales that are difficult to obtain
- Category of property or home
- The timeframe required to complete
- Any specifics needed by the hiring party
As you can see, it’s worthwhile to research an appraiser capable of assessing your house accurately. In the end, appraisers with the best education for your area with plenty of experience will be the best candidates.
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