{"id":369068,"date":"2016-04-04T10:47:11","date_gmt":"2016-04-04T15:47:11","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/realestate\/buying-a-home\/evaluating-a-home-checklist.html"},"modified":"2023-08-25T13:19:15","modified_gmt":"2023-08-25T18:19:15","slug":"evaluating-a-home-checklist","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/realestate\/buying-a-home\/evaluating-a-home-checklist.html","title":{"rendered":"Evaluating A Home Checklist"},"content":{"rendered":"\n
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Evaluating a Home Checklist<\/h1>\n
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\n By Melissa McCall, J.D.<\/a> | Legally reviewed by Katrina Wilson, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Buying a home is a fun yet sobering adventure. Curb appeal is lovely, but there are more effective ways to evaluate a home. Many factors go into properly assessing a home, including location, structure, and potential repairs.<\/p>\r\n

A checklist to guide you through the process will help you make an informed decision based on objective factors.<\/p>\r\n

This article explores different elements of evaluating a home. It also provides a checklist to help you as you shop for a house. Please note that this list is not a substitute for a professional appraisal.<\/p>\r\n

Why Are Home Evaluations Important?<\/h2>\r\n

A house is more than a home. For many families, a home is also an investment. It is a piece of real estate that will increase in value over time. As the property value of your home increases, so does your equity in the home.<\/p>\r\n

Home Equity<\/h3>\r\n

The term home equity refers to the difference between the value of the house and the mortgage, if any. For example, if the value of your house is $450,000, and your mortgage is $325,000, you have $125,000 in home equity. Some homeowners are eligible for home equity lines of credit based on their home’s equity.<\/p>\r\n

Buying and Selling a Home<\/h3>\r\n

Property valuation is helpful when buying and selling a home. It provides assurance to mortgage lenders, confirming the value of the loan’s collateral. Property valuation helps buyers understand the house’s market value and what they can afford. Buyers can also determine if the asking price is in their ballpark.<\/p>\r\n

This metric helps sellers determine a reasonable listing price. The bank may request a home valuation if you want to refinance your home. Homeowners often refinance their mortgages to take advantage of better interest rates.<\/p>\r\n

Property Taxes<\/h3>\r\n

The value of your home will also affect your property taxes. If you feel your tax assessor incorrectly calculated your property tax, you can appeal their decision. An accurate appraisal will help your appeal. Whether you are a homebuyer or a home seller, you must understand the value of your home.<\/p>\r\n

For these reasons, it is essential to understand the home evaluation process.<\/p>\r\n

Home Evaluation Process<\/h2>\r\n

There are a few ways to determine the value of a home. You can hire a professional appraiser <\/a>to analyze your home’s value objectively. Online real estate companies like Zillow offer a home value estimator. A home estimator tool uses a formula to determine the fair market value of a home. The federal government provides a house price index (HPI) calculator<\/a> to help homeowners understand their home’s value. Finally, a professional Realtor or real estate agent can do a comparative market analysis (CMA) on the house.<\/p>\r\n

Professional Appraisal<\/h2>\r\n

A licensed appraiser must give an unbiased opinion of a home’s value. The appraiser relies on several tools in producing a home appraisal. First, the appraiser conducts an on-site inspection of the property.<\/p>\r\n

They methodically go through every room and note things like extra amenities or the amount of square footage. They also physically examine the exterior of the house. They take notes on everything they see. Details such as renovations and upgrades can increase the value of residential properties.<\/p>\r\n

In the second step of a professional appraisal, the appraiser will consider the current real estate market conditions. Through public records, they can determine the closing prices of recent sales in the local housing market. They also look at the sales price for comparable homes.<\/p>\r\n

They use this information to prepare a report outlining the appraised value of your home.<\/p>\r\n

Online Valuation Tools<\/h3>\r\n

Many online real estate companies, such as Zillow, offer home value estimator tools. Like a professional appraiser, a home value estimator gathers information from public records to determine a home’s value. These valuation tools provide estimates and are not a substitute for a professional appraisal. At best, these online tools provide an estimated value.<\/p>\r\n

Federal Housing Finance Agency<\/h3>\r\n

The Federal Housing Finance Agency<\/a> (FHFA) was established after the 2008 real estate market crash. This agency oversees the Federal Home Bank System, the Federal National Mortgage Association (Fannie Mae), and the Home Loan Mortgage Corporation (Freddie Mac). Fannie Mae and Freddie Mac are federally backed mortgage companies. The FHFA aims to ensure prospective homeowners have access to federal loans.<\/p>\r\n

The house price index calculator<\/a> on the FHFA website helps to determine the current market value of a home. The FHFA website cautions users against solely relying on the calculator. It notes that the online tool does not project a home’s actual value. Rather, the HPI calculator projects a value if the house appreciates at the "average appreciation rate of all homes in the area<\/a>." The FHFA website directs users to consult a local professional appraiser.<\/p>\r\n

Professional Realtor<\/h3>\r\n

A professional Realtor does more than sell homes. Realtors are real estate professionals who are members of the National Association of Realtors. They are experts in home sales. A professional Realtor understands the local market and the value of comparable properties (often called "comps"). Realtors use information such as home prices on similar homes to estimate the value. They are not real estate appraisers; their expertise can help buyers, sellers, and lenders buy houses.<\/p>\r\n

Checklist for Evaluating a Home<\/h2>\r\n

This is a list of a few things to look at when physically evaluating a home. This list does not and will not replace a professional appraisal.<\/p>\r\n

Structural Problems<\/h3>\r\n