If you are about to sell a house, attempt to get a second mortgage, attempt to refinance your mortgage, or have your home repossessed, you will be having your house appraised. Dealing with an appraiser can be an unfamiliar experience and there are a number of serious mistakes you can make during the appraisal process. If you are about to experience an appraisal for the first time, the following advice should help you avoid the biggest mistakes you can make while dealing with an appraiser.
Never tell the appraiser what value you are expecting – Appraisers are not permitted to use expected value, list price, or previous sale price of a home to determine the market value of a house. In fact, they are required to stay as ignorant of those numbers as possible while making an appraisal. By telling the appraiser what value you would like, you are corrupting the process. In some cases the appraiser will no longer be able to continue with the appraisal, but you will still be on the hook to pay for the appraiser’s trip to your house, often roughly 33% to 50% of the actual appraisal cost. Even if the appraiser can continue, the appraiser is likely to actively try to avoid the value you requested and that is much more likely to lower the value of your appraisal rather than increase it.
Never advise an appraiser of how you intend to use the property – This rule is especially important when getting a second mortgage or attempting to refinance. An appraiser can determine the legal use of a property based on public records and from looking at it. If you intend to use it legally, you are just wasting your breath. If you intend to use it illegally, the appraiser is required to advise the bank and you will probably be unable to get the mortgage you are looking for. The only possible exception to this is if the appraiser asks you directly. In such a case, the appraiser probably sees something that looks commercial, but could also possibly be residential. If your intent is to use it legally, feel free to answer. If not, you are probably best professing ignorance.
Never advise an appraiser that this is a second opinion – Due to significant corruption in the past, banks are not permitted to obtain a second opinion just to obtain a different value. If an appraiser provable screwed up or renovations have occurred since the last appraisal, a second opinion is permitted, but a second opinion can’t be requested simply because you or the bank dislikes the value. If you are receiving a second opinion, you should never advise the appraiser. If the second opinion is legitimate, the appraiser is probably already aware, but not necessarily. Once the appraiser learns that the appraisal is a second opinion, the appraiser will likely cease inspecting immediately and advise the bank. Even if it is legitimate, this can seriously delay your appraisal. And, if it isn’t, this will cause problems for you and your bank.
Never threaten or curse at the appraiser – Assuming you are selling the house or trying to get a loan, you want the appraisal. Rude behavior will, at best, delay the process and, human nature being as it is, may cause the appraiser to give you a lower appraisal value then you want. Also, there is a good chance the appraiser may refuse to appraise your property, but you will still be required to pay the appraiser’s fee. If you are getting foreclosed on this is also a bad idea. Appraisers generally are familiar with the local authorities as are banks. You do not want the police to get involved. You are probably going to lose your house anyway, so legal trouble would just add to your problems. Also, if you stay cooperative throughout the process, there is a small chance the bank will work with you to keep your house.
Never limit access or fail to provide access – When the appraiser shows up at your house the appraiser expects to inspect the entire house quickly and in one trip. The biggest mistake you can make is to fail to arrive at the appointment or to provide a way for the appraiser to access the property. This will always cost you a trip fee and will cause the appraiser to move your inspection to the end of the queue. If you do this more than once and the appraiser will probably refuse to inspect your property. Similarly, make sure every portion of the property is accessible. For example, if you have an old cellar with a padlock on it, make sure you can unlock it before the inspection or cut the lock off if you can’t. The appraiser needs to inspect the entire property before an appraisal can be completed and does not want to have to come back at a later time. And, just like the previous advice, if the appraisal is for a foreclosure, refusing access will just cause you legal problems, which is not helpful in the long run.