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How Your Home Is Appraised: An Interview with Louise Rex of Solid Foundation Appraisals

By Louise Rex

Please tell us a little bit about your company and the services you offer.

Solid Foundation Appraisals is a residential real estate company of which I am the sole proprietor. We offer residential real estate appraisals which include single family homes to multi-million dollar estates, as well as 2-4 unit properties. We service both Sonoma and Marin Counties, but most of our business is done in Sonoma County, where I was born, raised, and lived most of my adult life. I also occasionally review appraisals for lenders and local real estate professionals.

In most cases, who typically orders a home appraisal?

Appraisal management companies who are contracted by lenders, real estate professionals, and homeowners or their heirs.

What types of appraisals would a homeowner order?

Homeowners typically order an appraisal when they are thinking about selling their house and want a market value, or a family member has passed and they need a retrospective appraisal for tax purposes or to settle an estate. Appraisals are also performed when a piece of property is being donated or as part of a divorce settlement.

Can you outline the major steps in the appraisal process from start to finish?

Of course, the first step is to inspection the property you are appraising. To most people's surprise, this is the shortest part of the appraisal process. It typically takes at least eight hours to write a report which includes describing the property, analyzing/summarizing the market trends within the subject's neighborhood/market area, selecting and researching comparable sales, taking comparable photos, gridding those sales, deciding on and reconciling adjustments, and summarizing the findings.

When you're inspecting a house, what are the basic areas you cover and some of the main things you're looking for?

The first thing we do when we inspect a house is measure the outside. This gives us an opportunity to look at the maintenance level of the exterior of the building/buildings. We take lots of photos. These do not always end up in the report, but are part of our note taking process. We then enter the home, taking any measurements we could not get from the outside, note the condition of the interior, the amenities, and again take lots of photos and notes. We are generally looking at the overall condition of the home, noting any deferred maintenance as well as significant improvements, and looking at the overall quality of the improvements as well as the home.

What does the inspection report include and when it is usually available?

The main parts of an appraisal states who the appraisal is for, the purpose of the appraisal, a description of the subject property, a summary of current market trends, a sales comparison analysis, and depending on the needs of the lender/client, the estimated cost breakdown of the house and the property, as well as the appraiser's opinion of value which is a culmination of the appraiser's research. The appraisal is typically available within a week of the initial inspection.

Is there anything that most homeowners or home buyers don't understand about the appraisal process?

They typically do not understand how we arrive at the value we have placed on the property or how we arrive at our adjustments. To the homeowner, it sometimes may seem arbitrary. However, everything that the appraiser does is derived from the market. Typically the process starts with an MLS search of recent sales and listings within the subject's neighborhood/immediate market area based on the size of the home, its condition, and its amenities. It should not be based on a preconceived value/price. The sales are then gridded and the adjustments are based on an analysis of several homes that appear to be the most similar to the subject. The adjustments are not based on the appraiser's opinion or how much was spent on a certain project but by quantifying how the market responds to size, condition, lot size, location and amenities.

What's the best way for people to contact you and your company?

The easiest way to contact me is by phone or email. I always have my cell phone with me and usually return my calls and emails within a few hours. My office # is (707) 545-2269, my cell # is (530) 276-7217, and my email address is Lantoneappr@gmail.com.

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