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About the Pennsylvania Home Appraisal Process: An Interview with Darryl Fanelli of Fanelli Real Estate, LLC

By Darryl Fanelli

Many homeowners have never had a home appraisal before. The process may seem unfamiliar and many have questions about what occurs and what influences price. That's why we interviewed Darryl Fanelli of Fanelli Real Estate, LLC to learn more about the home appraisal process.

About Fanelli Real Estate, LLC?

Our company is Fanelli Real Estate, LLC. We are based out of Southern New Jersey, Washington Township in Gloucester County, which is about 15 minutes outside of Philadelphia, PA. We perform various types of residential and commercial appraisals throughout the Philadelphia area. Our clients include banks, attorneys, and individuals. Based upon those clients, the use of our appraisals include mortgages (purchases/refinances/home equity), divorce purposes, estate planning, trusts, for sale by owner, tax appeals, etc.

As an appraisal firm, our number one mission is to be professional and provide an accurate and unbiased opinion of value.

What is the Appraisal Process?

There are several parts to the appraisal process. The first step individuals will be made aware of is generally the property inspection. Most times, an appraisal will be performed with an interior and exterior inspection. Several years ago, a drive-by or exterior only appraisals, were commonly ordered by lenders and banks; however, since the collapse of the housing market, it's more common for an inspection to include both the interior and exterior of properties.

During the inspection, the appraiser will then take photos of your property, exterior and interior. This is done for several reasons:

  1. For the appraiser's file. Once back in the office, this will allow the appraiser to verify/reference the property condition, amenities, and/or attributes when writing the report. Even though appraiser's will take notes about the property during the inspection, re-looking at the photos taken will allow the appraiser to look more closely at the property.
  2. Photos allow lenders, attorneys, or whoever the client is, to see exactly what they are lending on or what their clients property looks like. The photos are placed within the appraisal report to allow the reader/client understanding of what the property offers and how the value has been concluded.

The inspection time depends on the property type, and how large the property is. Most inspections on homes will be completed within 30 minutes. Commercial properties can take a little bit longer. The inspection is generally the quickest portion of the process. Once the inspection has been completed, the property owner is generally out of the picture. The rest of the process is on the appraiser.

The next step in the process is normally the selection of comparable sales. I guess the lingo attributed to these are called 'comps'. The appraiser will search throughout the market area for properties that are similar or compete with the subject property. Most times, an appraiser will also look at active listings, just to see what competing properties are being listed for. However, value will never come from a listing, it always comes from properties that have sold. Value is created when two people (buyer/seller) come to an agreement. The reason listings won't be considered in the value is that a person can list their home for whatever amount they would like, but that doesn't mean someone is willing to pay that price.

Once the market research is completed, the appraiser will begin writing the appraisal report. The report will have data regarding the subject, market area, market trends, and valuation. This report will then be submitted to the appraiser's client.

A home appraisal will generally be completed within a week. A commercial or land appraisal can take several weeks.

How Should a Homeowner Prepare for an Appraisal?

There isn't much to prepare for. If you have documents on hand like your tax bill, survey, deed, recent upgrades, they would be beneficial to an appraiser. But don't worry if you don't have them. Appraiser's will be able to get by without them. People are generally concerned about their 'messy' house.

Appraiser's aren't looking at your personal items. Appraiser's are looking at your floors, walls, ceilings, kitchen (cabinets, appliances, counters, etc.), bathroom , etc. It is helpful to pick up before the inspection, it will allow the appraiser to walk through the home better and get a better understanding of the condition of everything. But don't worry, a home always has some 'mess' to it. Dirty clothes on the floor won't be factored into the value.

Should a Homeowner Stage Their Home Before the Appraisal?

There is no need to stage a home. A staged home is generally for selling purposes only. Homes are staged so potential buyers get an idea of how the home can function, how large the rooms really are, and homes with newer furniture always look better than a vacant house. However, for an appraiser, this really doesn't have an impact. The appraiser doesn't care what kind of furniture is in the home, it isn't being factored into the value. So whether you have a $20,000 furniture piece or something from a thrift shop, the appraiser will still be looking at the walls and floors, and not the furniture or any personal items.

What Does an Appraiser Look For?

The appraiser isn't necessarily looking for anything in particular. The appraiser is just seeing what your home offers in terms of condition, amenities, location, size, etc. Once the appraiser has a good understanding of what your home offers, the comparable search will begin. The appraiser will look for homes with similar condition, amenities, location, size, etc. It will be the comparables that ultimately determine your value. Many times people will try to 'sell' their house during the inspection. I guess it never hurts, but I'm not looking to buy your property, nor do I care about my personal opinion of your home. The properties that have sold around you, your neighbors, will be the determining factor of value. An appraiser will look to see what people are paying for similar homes to yours.

What Influences the Price of a Home?

This is a question I get all the time, and it's a difficult question to answer because every market area is somewhat different. Regardless of anything else, a large factor in value will always be condition. Kitchen, baths, flooring. It's great if you have (5) fireplaces and a spa in your house, but if your kitchen and baths are from 1940, buyers will likely pay less for your home than one that is more updated.

How Much Does Curb Appeal Influence Price?

When curb appeal is mentioned, it generally refers to the exterior of a property. But it also takes into account a personal opinion. As an appraiser, when I walk up to your property, I don't necessarily care if I like your property, or if it appeals to me. Curb appeal is more of a selling point for agents and individuals.

What I care about is how your property stacks up against all the properties that have sold. Whatever your home offers, I will be looking at the comparables for similar items to see if it impacted the value.

What is the Price of an Appraisal?

It is generally a one fee service. There are times when additional fees may apply. For instance, some properties require repairs to be made before closing. If they require an additional inspection that these repairs have been completed, an additional fee will apply. Appraisers can also be required to testify in court regarding an appraisal. These appraisals are usually performed for divorce, bankruptcy, estate purposes, and others. If an appraiser is required to go to court, it will usually be an additional compensation on a hourly basis.

What Services doe Fanelli Real Estate Provide?

We are an appraisal firm that provides appraisals for residential and commercial real estate. This is the primary function; however, we do offer other services including consulting. Our consulting services benefit realtors, individuals, and investors. Sometimes realtors have a difficult property and need additional advice if a property is priced properly. Other services we offer realtors are the measurement of homes. Sometimes, investors and individuals are looking for another opinion or another analysis from someone in the market that can help them make decisions.

Contact Information?

The easiest way to reach us is either phone or email. Our website is www.philadelphia-appraiser.com, our information is always available there. The website also offers a contact form that can be submitted.

We are on the road a lot; thus, sometimes unable to answer a phone call. However, all calls are always returned asap.

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