Why Should I Get a Home Appraisal? – Video
Kathy Fettke: While we have you, is there anything that you think that people should be aware of? How do you believe that people can protect themselves from overpaying?
Interviewee: Here is what I would recommend and what I typically tell young buyers who are either first time homeowners, or maybe looking at their second home, is, everyone should read the appraisal prior to the close or best close so they can make a decision if the house is as described or as they see it. Everyone should spend the money to get a whole home inspection. Someone that’s sophisticated and educated enough with the training to tell them that, “Hey, in the attic where you can’t crawl but I did, there’s an exhaust pipe that’s venting gas from the hot water heater into the attic and that’s dangerous.”
That is well worth the $200 – $400 that one typically costs, because it provides the buyer with information as to what is really in the house. That also applies to a termite report that tells the buyer are there any risks associated with this property. That’s just due diligence on the part of the borrower to determine, “Am I being told everything there is about this piece of property?”
This is no different than going to buy a used car, and you hear the ads all the time, if you’re going to buy a used car, ask them to give you a copy of a Carfax. It’s the same process. You want to know what is hidden that you haven’t been told.
I’m going to give you an example of what is happening in our area, and it’s probably happening in a lot of other areas. A lot of homes are so inexpensive that were foreclosed on that they were either purchased on the courthouse steps, or as a short sale from an owner that was in distress, or a state sale, or some sale where the investor bought the property with the intent of fixing it up and turning around and selling it 30 or 60 days later. They’re flipping the property. And everybody’s seen the programs on TV of Flip This House.
What we’re seeing in our area is that a lot of the flippers are the, for lack of a better term, scam artists who come in and put paint on a pig. They’ll go in, they’ll change the carpet, they’ll paint everything, they’ll clean everything, they’ll shine everything. If something’s broken, like an appliance, they’ll fix it. Anything that’s visual, they’ll dress up really nice. What I always recommend to buyers too when they’re making their first walk-through is, if they don’t want to spend the money for a home inspection is, open every cabinet, look behind every door. If you can look under the crawl space of the house, do that. If you can look in the attic, do that. When they’re walking through the house and they get to the kitchen, pull out the cutting board that’s usually in any kitchen cabinet setup, especially if it’s an older home that’s just been painted and carpeted and polished up.
I have found more rotten meat on cutting boards in kitchens that looked pristine because all the investor did was come in and put paint over a pig. And all that tells me is, if they are unwilling to go far enough to clean everything, and paint inside cabinets, and so forth, what is hidden that an average buyer will never see until they get in the house and they find that the gas is vented into the attic, or the electrical lines aren’t wired the way they’re supposed to be.
Kathy Fettke: Great information. Okay. Well, thank you so much for taking this time to help us understand the appraisal process better.
Interviewee: You’re welcome.
Kathy Fettke: I really appreciate it. And hopefully, as you said, we can’t really necessarily promote you because we don’t get to choose you.
Interviewee: That’s the drawback there. The thing that I like to do in these type of situations is give the users of the report, whether it’s a borrower or investor, the information so they can read the appraisal and understand what the appraiser is saying. How they take that information, or what they do with that information, from that point on is something that is in their hands to either proceed with or put down and go a different direction.
Kathy Fettke: Wonderful. Well, thank you so much again. It’s great reconnecting with you and thank you again for helping educate our group.