After falling in love with a house and having your offer accepted, an important part of the home-buying process is getting the house appraised. Unlike a market analysis, which a real estate agent uses to help price a home, an appraisal is conducted by a licensed or certified appraiser and is one of the steps in the closing process. But what goes into a property appraisal? And what is the job of an appraiser like?
Jackie Jackson is a Certified Real Estate Appraiser with Penfield Appraisers. Although based in Two Harbors, Jackie–together with her husband Kelley Jackson–travel all around Lake County and Cook County to appraise properties. If you’ve taken out a mortgage in Lake or Cook County in the last 20 years, there’s a decent chance that the Jacksons were the ones to appraise the property. It’s a job with quite a bit of variety: Jackie’s days are sometimes spent working on research and reports, and sometimes spent on the road visiting properties, from those right on Highway 61 to remote properties without road access.
“I became an appraiser because I was selling lake homes at Superior Shores,” she said. “My sister was working at a bank and she said that there was a shortage of appraisers in the area. I ended up meeting the people who owned the company I previously worked for and decided to take the classes I needed to become licensed.”
Appraisals can be required for several reasons, the most common being when a lending institution is lending money for a mortgage. (This is true whether it’s a new loan or refinancing an existing mortgage.) Since the property is the collateral on a mortgage, it needs to appraise for at least as high as the sale amount to protect the lender in case of a loan default. Therefore, as part of the borrowing process, the lender brings in a third-party appraiser to give an unbiased determination of the property’s value. If a home doesn’t appraise for high enough, the purchase may be delayed or fall through altogether. Thus, it’s important for appraisers to have a thorough understanding of the area in which they work to accurately assess a property’s value.
Apart from mortgages, appraisals might also take place for other reasons such as a divorce or for calculating estate taxes. Depending on the situation, Jackie said that they sometimes work directly with people buying or selling a property, but that the lending institution is the one who orders the appraisal for anyone in the process of getting a mortgage.
No matter what the reason for the appraisal, Jackie said that the process starts with a visit to the property. “We start by measuring the outside of the house, taking photos, and measuring all of the outbuildings. We consider the view, whether it has water frontage or whether it’s surrounded by woods. Then we go inside and go into all of the rooms to take photos and make notes of the construction materials. We also check the mechanicals, which include things like the furnace, electric or air conditioning, and make sure they’re in working order.”
After the property visit, Jackie compares the listing to other recent sales in the area, looking for properties that are similar in size and location. If it’s a lakefront property, she looks for recent sales on nearby lakes, and for townhomes and condos she looks at other sales in the same building. She uses the data both from her research and the site visit to create a final report, in which the appraised value is given.
Altogether, Jackie said that she enjoys the career path she has chosen. “I like getting to work with my husband as a team and getting to meet lots of nice and wonderful people. Lake and Cook counties are so beautiful, and I like that we don’t have to be at our desks all day and get to be on the road seeing lots of neat places.”
