Is the Home Appraisal Becoming a Lost Art? Return to Articles
Disclaimer: This blog may contain affiliate links .
We are in the process of refinancing our home to take advantage of lower interest rates. I was really excited to put RezDox to the test by providing the Appraiser a copy of our Home History Report. I am competitive, so of course I wanted to learn how much more value would be added to our home’s worth based on the data from our digital history. I couldn’t wait to prove our home’s condition with a list of our maintenance and improvements. To my dismay, I learned that our loan doesn’t qualify for an appraisal because our transaction is less than $250,000. I know I should be thrilled that we are getting closer to paying off our mortgage and going through the appraisal process is one less thing to worry about, but actually, I was deflated. I felt like a student who spent all weekend working on extra credit, only to see a substitute teacher on Monday morning.
Changes to the appraisal process have been in the news recently, as the Fed is due to approve a proposal supported by the FDIC (Federal Deposit Insurance Corp.) the OCC (Office of the Comptroller of the Currency) and the Board of Governors of the Federal Reserve. This proposal would increase the minimum appraisal requirement from $250,000 to $400,000, which means if your transaction value is less than $400,000 you don’t need an appraisal. For more information on the proposal, or certian restrictions, take a look at the following article by Ben Lane, Managing Editor of HousingWire.
There are pros and cons to increasing the thresholds, and your view will depend upon your personal or professional interests. As with any policy change there will also be unintended side effects, as revealed by Liz Dominguez of RIS Media who suggests there will be a greater use of AVMs (automated valuation models) . Can the use of drones, artificial intelligence and algorithms replace the expertise of credentialed appraisers?
Looking at our RezDox Dashboard, so far we have spent $51,855 on our home maintenance and improvements, of which $27,846 has contributed to the equity growth in our home’s market value. This information would have been invaluable during the appraisal process. We would have happily provided electronic documents for every project detail including the contact information for our service providers, product manufacturers and skus, invoices and even uploaded photos.
While the appraisal industry is transitioning, one thing will remain true…the condition of your home will impact your appraisal value. Right now big data can’t solve for interior improvements, so regardless if your home valuation is coming from an AVM or an Appraiser, it’s up to you to prove your home’s worth.
Trachelle Spencer