April 22, 2025 • 24 mins
Join us as we break down the mystery behind one of the most talked-about steps in the homebuying process: the appraisal. In this episode, we sit down with Phil Hines of Hines Appraisals to talk about what appraisers really look for, why Zillow doesn’t cut it, and how appraisals are different from home inspections. From surprising stories to must-know advice for buyers and sellers, this episode is packed with insights that will help you feel confident when it comes to property value, deal breakers, and what can actually derail a loan. Whether you're a first-time buyer or a seasoned homeowner, you’ll walk away knowing why the appraisal matters—and how to be prepared.
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(00:00):
welcome to your favorite mortgage guy
(00:02):
podcast The show that brings you timely
insights on essential tips and
everything you need to know about
mortgages It's time to get informed get
inspired and get moving with your host
Steve Rockefeller Because here your
favorite mortgage guy has your
back It's your favorite mortgage guy
Steve Rockefeller here with another
edition of our podcast
(00:25):
All things home ownership financing
appraisals you name it we're here to
demystify it Today our special guest is
Phil Hines with Hines Appraisals People
ask all the time questions like "Why do
I need an appraisal when my house is
worth a gajillion dollars why do I need
this what is the appraiser for who is
(00:46):
this guy that's coming by and taking
pictures and why didn't he get out of
his car?" So many aspects of why is an
appraisal needed So guess what we're
going to demystify that today Phil
welcome Hey thanks a lot for having me
Steve No problem No problem So listen
Let me ask you a couple questions here
Sure You know I know in my job every day
people
(01:08):
get a little frustrated because they
apply for their loan and not only do
they have to strip naked financially in
front of me and give me every one of
their documents they get a bill from us
that's 650 whatever the number is
Why do I have to pay for the appraisal
it's part of the closing cost And I'll
say well but the appraiser is an
independent contractor He's got to do
(01:30):
his job Why do I need an appraisal when
Zillow says this so I guess my question
is what's one of the most difficult
aspects of your job when dealing with
sellers yeah And appraisals Well that's
a good question Thanks for having me on
Steve Um a few things is to your point
not everyone fully understands the
purpose of it in general So um you you
(01:53):
can look at online estimates whether
it's
realtor.com Zillow Trullia uh or even
some people point to like their tax
assessment The thing the problem with
all those is they're not actually going
in the house So unless you just have
paid down a tremendous amount of your
mortgage or have a ton of equity um the
numbers are probably going to be tight
(02:15):
from from the bank's perspective So it's
just a riskmanagement thing So the bank
just needs to know if we're going to
give you a mortgage for you know
$500,000 we need to make sure the house
is in good working order and is you're
paying um a fair price relative to the
market So it's really a two-part process
(02:36):
We do a lot of our time um doing the
report you know in the office but we
also have to do a physical inspection
most of the time Um and that's where you
uncover a lot of issues Like for example
I just did one last week The square
footage was wrong by about 300 square
foot So um that's like a quarter of a
house for some homes you know So that
(02:57):
that can make a pretty big impact in
terms of value uh in terms of what
you're using to compare your homes
against So there's a lot of things like
that Um and you know I I'm a homeowner
too I think my home is worth probably
way more than it is Uh and you're an
appraiser And I'm an appraiser So you
know it's an emotional process Everyone
(03:18):
has a lot of pride in their home Um our
job I always tell people is I'm like a
umpire or a referee We just call balls
and strikes We're not getting paid you
know if the house closes we're just
getting paid just a small flat fee and
that's it
So one of the things that I think the
(03:40):
average consumer is confused about is
the difference between a home inspection
and a home appraisal Do you climb up
into the attic do you go underneath of
the house so there are so generally no
Okay Uh there's a big difference So home
inspection is really optional Um I think
most buyers should get a home inspection
(04:02):
Uh but that the home inspection has
nothing to do with the bank So when it
comes to like lending an appraisal is is
really a requirement Um unless you're
putting um x amount of dollars down or
it's just very clear that the property
has a tremendous amount of equity Um for
a VA appraisal uh you do uh in FHA you
(04:23):
do look underneath the house but you're
not really doing you're not doing an
inspection a crawl space inspection Uh
you do peek in the attic Um but again
it's very different I I say an appraisal
inspection mainly we're verifying the
square footage We're uh viewing every
room just to verify characteristics Um
(04:45):
and it's it's a pretty light inspection
Uh like I said a big part of our job is
back at the office running the report um
to compare the properties We're really
more interested in fair market value Um
we're not looking to test every
mechanical system A home inspection will
be there for two or three hours and
they're going to really poke and try to
(05:06):
find holes in any part of the house So
Phil one of the things that I like
working with appraisers one of the
things I like about working with
appraisers is the fact that 34 years in
the mortgage business I've worked with a
lot of appraisers
Some of them
um probably should retire M I I enjoy
(05:28):
working with working with young people
like yourself because I feel like you're
more progressive I feel like that you're
more in tune to the market value and
some of the some of the appraisers that
have been around a while tend to be more
transactional Oh that house on Bow Creek
Boulevard snap a picture slap a price
tag on it
I feel like with your appraisals they're
(05:49):
a little more invasive which they should
be because you're there to protect one
the consumer or maybe I should say one
the mortgage company two the consumer
cuz we're going to protect the consumer
as well What What kind of requirements
educational requirements does it take to
become an appraiser yeah that's a good
question It's so I should also mention
that I'm I am also a realtor as well
(06:11):
right and so uh both professions are are
equally important Uh however the
requirements for for whatever reason to
become an appraiser are much more
stringent than it is to become uh like a
licensed real estate agent Somebody told
me one time that it's harder to become
an appraiser than it is to become a
hairdresser I don't know what the
requirements are to become a hairdresser
(06:32):
to be honest with you but uh I I don't
know Basically u guidelines may have
changed over the last couple years I
don't know Uh but as a general rule of
thumb it's like an apprenticeship So you
have to basically train for 6 to 12
months Um I think you have to do like
over a,000 hours of training Um and
(06:54):
that's 6 months Yeah 6 to 12 months And
you have to train under someone Uh and
then the educational requirements Um I
think there's seven or eight courses you
have to take and then obviously you have
to take like a state licensing test So
continue education Yeah I would say it's
about it took me about a year to get um
fully licensed and at the time that was
(07:17):
like the fastest you could do it So I I
it change it may change state I think it
changes state by state Um but I I'd say
in general it's it's about a 6 to 12
month process Really that's just the
beginning though So you know once you
get licensed you know it's just like
anything else Now you got to get in the
door get the business and like you learn
as you're also learning as you're going
(07:38):
to So you know every day you learn
something new For example I have an
appraisal coming up that has an
ingground pool That's pretty rare in
Hampton Roads for someone's house to
also have an
inground indoor pool Oh Oh okay You
threw me off for a second there I got
you Yeah So an indoor pool in a
(08:00):
neighborhood I don't know where I'm
going to find a home that's sold in the
last 12 months with an indoor pool in a
neighborhood in Virginia Beach Well I
know of two because I financed two in my
career Good One was in Fairfield in
Virginia Beach and one was over there in
Indian River Plantation Well we'll have
to get with you after this Yeah But but
we're talking about significant price
differences Yeah Yeah That's a tough one
(08:22):
Yeah guys See it's not as easy as
everybody thinks it is He just doesn't
go out there and take a picture and and
plug a value in So is there any advice
that you have for home sellers to
prepare their house for appraisals i
know you have probably seen it all
because guys when I get an appraisal I
typically don't look at them unless
(08:44):
somebody on my team says "Steve wink
wink you got to see this one Wait till
you see all the broken down this and
that and the other in the backyard or
the the tall grass or wait till you see
the decorations these people have." Yeah
No that's a good question
Um so I would say a few things It
certainly helps if it's you know
(09:06):
presented well and it's just sort of
easy to get in and out of Um I'd say
from like a logistical standpoint when
we go we're we're just going to look at
the house right so I'm not really
looking to have a drawn out conversation
with a homeowner or even an agent and
it's not about the personality of any
like we're looking at the house and what
(09:28):
the house is worth and what the property
is worth So I would say just you know on
a quick note you know keep dogs out of
the way you know if you can keep the
floor clean a little bit to the extent
that such that we can just walk through
it and not trip over have trip hazards
So there's some basics there
you know if you clean the house great
but at the same time like we're trained
(09:50):
such that if there are some clothes on
the floor or the bed's not made we can
see past that that has nothing to do
with like the value of the property Um I
would say more important things are
probably you know
uh if you're looking to add value you
know updated bathrooms updated kitchens
always help Uh as it relates to like
(10:12):
windows and stuff you know there are
certain items that we have to flag for
safety issues So if you have um you know
a shattered window that's going to be an
issue It has to be addressed by by us
because of the bank uh as a safety issue
So if you have like some windows that
are cracked or shattered I would get
those addressed before the appraisal Um
(10:35):
if you've got super loose handrails or
unsafe handrails or deck boards get
those fixed or addressed because those
are some pretty common issues that will
get flagged Um because the bank doesn't
want to lend the bank doesn't want to
give money out for a house that's got
some safety issues So a couple of
questions that I get from clients um
(10:57):
they'll ask
me is an air conditioner required uh on
an appraisal Um and and my standard
answer is
well heating is and a sink but not and a
stove Mhm But dishwasher air
conditioning is not required as part of
the plan Yeah I mean you could have a
window unit Right Right Uh but yes
(11:20):
correct A you do have to have a stove Uh
even a refrigerator is not a requirement
right uh it's certainly not a dishwasher
I mean that's still kind of a luxury
item right there's a lot of people that
don't have dishwashers Uh sometimes it's
just a space issue Uh and some people
just like to hand wash So uh but yeah
you AC is just I mean it now it will add
(11:41):
some value if you have central heating
and cooling or you have split units Um
but it's not a requirement but you do
need to have um heat and you do need to
have a stove and and uh another question
people often get or ask is you know uh
like clo bedroom count and whatnot Um
it's got to have a window right so if it
(12:03):
doesn't have a window I can't that's
that's like a big closet Okay Wow I just
learned something Yeah So if it doesn't
have a window it's a big closet pretty
much I mean you have to have a safe way
to get out I mean you heard it here Yeah
If you don't have a window you got a big
closet So um so what about another
aspect i noticed that all of the
(12:25):
pictures that you guys send in And guys
an appraisal report is a a literal
report It comes in color It's about 20
pages Yeah it's 20 to 30 pages Yeah All
pictures inside of the house outside of
the house sideyard It's got measurements
on it It's a report It's a valuation
(12:46):
report So but what I noticed is there's
never any family photos in any of the
pictures you guys take What do you do do
you go in and prepare the seller hey get
rid of those pictures off the wall and
or is that the realtor's job yeah No I
don't I mean we don't you know we like I
said I my job's not you know my client
is the lending institution So uh I think
(13:09):
some people do maybe try to well first
off by the time you get to an appraisal
you're typically only a few weeks away
from closing So a lot of people have
already packed their bags Their stuff's
in the garage So I'd say that's one Um
but yeah like we don't really advise
sellers or anything of that nature Um
cuz that wouldn't really be right either
Uh but yeah no I think a lot of times
(13:31):
people are already packed up ready to go
They're just waiting on us to get it
done Uh and then other times you know
people may pull stuff down uh just to
keep the house like as neutral as
possible So So on those rare occasions
and I say rare um because it is one out
of 10 in my opinion that that you do not
find the value is there a dispute
(13:54):
process yeah there's it's called what is
it well there's there's depending on
what loan you get So if like if it's a
VA loan if you're a military buyer uh
that's called the Tide I think it's
called Tidewater Um there but basically
yes you can It's it's called a
reconsideration of value ROV Um bottom
(14:17):
line is if I do the report and let's say
I'm just having a hard time struggling
that the market and the homes around you
are uh supporting the sales price say
it's $10,000 short of the sales contract
because maybe somebody just threw it up
against the wall Yeah I mean it's just
hard to say Like anything we do we have
to justify with data So even if you
(14:42):
might be willing to pay 500,000 for a
house in your neighborhood if all your
other neighbors bought their homes for
390 or 395 I just like I I have to find
a way to justify that And if I can't
then the value will be a little bit
lower You though as the uh consumer you
can do what's called a reconsideration
(15:03):
value Um basically you just work with
your agent and say "Hey here's a few
different comps we want you to consider
Um and then I'll certainly look at it."
You know sometimes I've changed reports
Um I'm only as good as the data that I
have Right So uh listed houses you can't
use Yeah It's got to close It has to be
(15:25):
it has to be a closed sale It can't even
be a pending sale Okay Uh and because
you know and if you've been in the
business for a long time you you know
you know that the deal is truly not done
until it's done And so uh I mean as an
example I had a situation a few years
ago The clo I mean I couldn't it's a sad
(15:48):
situation really but the closing the
buyer had signed their papers on like a
Friday It was a Memorial Day weekend So
that following Tuesday the seller was
going in to
sign at like
noon Memorial Day night the
buyer died Oh drunk driving Oh excited
(16:12):
about the house
Actually the buyer passed away I mean
how the deal completely fell apart So
the thing is uh we can't use a pending
It's got to you know so yes when I'm
comparing any home I've got to use homes
that have sold We try to find homes that
have sold as recently as possible as
close as possible as similar as possible
(16:34):
I wouldn't compare like a 3500 ft house
to a 1500 ft house Um even though you
could make adjustments and stuff like
that it'd be like comparing a a minivan
to like a convertible They're really two
different markets or two different pools
of buyers and demand So yeah Well so I I
(16:55):
think a lot of people nowadays go to
websites like Zillow Yeah Uh I know I
personally do I mean I like like if a
client says "Hey I bought 123 Maple
Street." Yeah I I'll go look at it real
quick cuz I want to know what I'm
dealing with More than anything the
reason why I want to know is because if
it's a rural property I want to know
okay is the guard rails are the
guardrails hanging off the porch you
(17:17):
know are is there I'm looking for things
that the appraiser is going to pick on
And in rural properties we see that a
lot where there's some separation from
foundation or what have you Depends on
the loan type right if it's conventional
loan you're probably going to be okay
But if it's a government back loan
you're not Do you run into many times
where we have where you have to go back
and say "I need you to put a rail on
(17:39):
this um or uh I mean I Yeah The the most
common thing that I've run up against is
not necessarily the handrail fog
windows." Yeah And that's the most
common one that I've dealt with and it's
not that common is really it's those
deck boards uh that are just oh the ones
that are like curled up and well they're
(18:00):
just you could just fall through it Like
there was one that almost like fell
through Um and it's really just those
deck boards that are just soft and
deteriorating That's the that's probably
the most common thing Um I've a couple
like I've noticed a few like shattered
windows Um I don't know This one house
had like just a tremendous amount of
(18:21):
missing siding Uh but the main thing is
is really just these deck boards that
just start rotting away Um but that's
again that's an easy fix That's not that
doesn't have anything to do with the
value It's just you just replace a
couple boards Um and you can either do
it before we go out there in
anticipation that we'll catch it or you
could wait and then if we catch it then
(18:43):
you just have to do it Yeah
or if the home inspector picked it up
and then that's still negotiable with
the buyer and whatnot So um but yeah I
think fog windows for you on a different
loan that matters more Uh t typically
it's it's the handrail it's the the
decking and then the windows are kind of
like the most common things So guys what
(19:05):
you're hearing today is an appraisal is
important It's important to me as we're
loaning you money because let's just use
$500,000 house If you're paying if
you're get a veteran and you're getting
100% financing we're loaning money based
upon a valuation that a third party is
putting on it not the third party real
estate contract the third party
independent appraiser So 100% financing
(19:28):
we want to make sure that that value is
there or if it's a conventional loan
depending on the down payment or some
sort of a government back loan or if
you're a first-time home buyer most
importantly you want that appraised
value because you want to make sure
number one your investment is protected
You don't care about the seller We get
that But you also want to make sure that
the buy the house that you're buying is
a sound investment And there's two
(19:49):
aspects There's the appraisal and then
there's the home inspection which is uh
an optional report Yeah
So let's kind of tow a B tie a bow
around this Why is an appraisal needed
people ask me that all the time I have
my answer What's your answer well
there's a lot of different reasons for
that So just to back up again an
(20:11):
appraisal is an opinion of value right
so you could be an appraiser and you
could have your own opinion that could
differ from mine Ideally they're all
they're pretty close you know because
the way you view things might be a
little bit differently than me and
that's fine So as a as a setup it's it's
an opinion of value Um and and we have
(20:32):
guidelines that we follow Um why is it
needed well it's needed for a lot of
different reasons From a lending
institution again you guys need it
because what you just said you want to
make sure the property is is worth what
you're lending on Um and you guys need
to be in a secure position not just for
you but also for the buyer There are a
lot of other reasons why people need
(20:53):
appraisals and that's a lot of what I do
Um for example I've done several where
you know for estate work Someone passed
away the family's dividing up the estate
Every everyone thinks their house is
worth more than or some people think
it's worth more and some people think
it's worth less Family's got to divide
it up They need someone to come play
referee and say "This is what it's
(21:14):
worth." And then they split it up
Divorce unfortunately is another big one
People are splitting up someone's got to
you know buy that other party out and
they need a third party to come in and
say "Hey this is what's worth and here's
what you need to pay to buy that person
out." So those are um a couple different
reasons A lot of times agents if it's
like a complex property um they'll call
(21:36):
me and say they need help pricing it
because pricing the properties is pretty
important when you want to sell it for
top dollar And so I do a lot of what's
called like pre-listing appraisals Uh
but at the end of the day I think
everyone's especially in the world of so
much information everyone's just trying
to figure out what's my property worth
Right Right And so that's the question
(21:58):
right what's my property worth that's
the question And so um yes a lot of
times the market will tell you but at
the same time before you put your
property on the market you don't want to
overshoot by like 200 grand or something
crazy So you want to be in the right
ballpark And so I think we have we at
least me I provide appraisals for a lot
of different reasons But again back to
(22:22):
lending we're just our client's the bank
and we're here to protect you and you're
there to try to protect the buyer such
that we don't have a situation that we
had in 2008 where people are underwater
Um and you know on that note I would say
Hampton Roads is doing pretty well I
think we're a pretty steady market Um I
don't think you'll see us We don't go up
(22:44):
like Florida but we don't go down like
Florida So I think we're as long Texas
or Texas and some of these others you
know Raleigh and stuff like that So as
long as our military stays here uh and
we have a strong workforce there I think
we'll continue to just be like a steady
incline Um and I'm I'm I'm optimistic uh
about Virginia Beach and Hampton Roads
(23:06):
at large So perfect Uh I think uh I was
just talking to people the other day The
time to buy if you want to buy a house
and that's the right situation for your
your life the time to buy was yesterday
and then the next best time to buy is
today cuz I don't think prices are going
down in general uh in most markets I
don't think homeowners insurance is
going down and I don't think taxes are
(23:29):
going down So go ahead and get your
property while you can
Wow You heard it from the expert the
time the best time to buy was yesterday
If you missed it then you got to buy
today because insurance is definitely
not going down It went up 30% in the
last 12 months Taxes well we already
know taxes never go down Um and then
(23:51):
values very rarely do they decline in
markets like we're in right now Phil
thanks again for coming in today I
appreciate it Guys you heard it from the
expert Phil Hines Hines Appraisal
Service I'm your favorite mortgage guy
Steve Rockefeller here Stay tuned for
the next edition Bye now Thanks for
tuning in Make sure to follow your
favorite mortgage guy on Facebook
(24:12):
LinkedIn and Instagram Have questions or
ready to take the next step reach out at
steveloans.com or call
757301-9776 We'll catch you next time
welcome to your favorite mortgage guy
(00:02):
podcast The show that brings you timely
insights on essential tips and
everything you need to know about
mortgages It's time to get informed get
inspired and get moving with your host
Steve Rockefeller Because here your
favorite mortgage guy has your
back It's your favorite mortgage guy
Steve Rockefeller here with another
edition of our podcast
(00:25):
All things home ownership financing
appraisals you name it we're here to
demystify it Today our special guest is
Phil Hines with Hines Appraisals People
ask all the time questions like "Why do
I need an appraisal when my house is
worth a gajillion dollars why do I need
this what is the appraiser for who is
(00:46):
this guy that's coming by and taking
pictures and why didn't he get out of
his car?" So many aspects of why is an
appraisal needed So guess what we're
going to demystify that today Phil
welcome Hey thanks a lot for having me
Steve No problem No problem So listen
Let me ask you a couple questions here
Sure You know I know in my job every day
people
(01:08):
get a little frustrated because they
apply for their loan and not only do
they have to strip naked financially in
front of me and give me every one of
their documents they get a bill from us
that's 650 whatever the number is
Why do I have to pay for the appraisal
it's part of the closing cost And I'll
say well but the appraiser is an
independent contractor He's got to do
(01:30):
his job Why do I need an appraisal when
Zillow says this so I guess my question
is what's one of the most difficult
aspects of your job when dealing with
sellers yeah And appraisals Well that's
a good question Thanks for having me on
Steve Um a few things is to your point
not everyone fully understands the
purpose of it in general So um you you
(01:53):
can look at online estimates whether
it's
realtor.com Zillow Trullia uh or even
some people point to like their tax
assessment The thing the problem with
all those is they're not actually going
in the house So unless you just have
paid down a tremendous amount of your
mortgage or have a ton of equity um the
numbers are probably going to be tight
(02:15):
from from the bank's perspective So it's
just a riskmanagement thing So the bank
just needs to know if we're going to
give you a mortgage for you know
$500,000 we need to make sure the house
is in good working order and is you're
paying um a fair price relative to the
market So it's really a two-part process
(02:36):
We do a lot of our time um doing the
report you know in the office but we
also have to do a physical inspection
most of the time Um and that's where you
uncover a lot of issues Like for example
I just did one last week The square
footage was wrong by about 300 square
foot So um that's like a quarter of a
house for some homes you know So that
(02:57):
that can make a pretty big impact in
terms of value uh in terms of what
you're using to compare your homes
against So there's a lot of things like
that Um and you know I I'm a homeowner
too I think my home is worth probably
way more than it is Uh and you're an
appraiser And I'm an appraiser So you
know it's an emotional process Everyone
(03:18):
has a lot of pride in their home Um our
job I always tell people is I'm like a
umpire or a referee We just call balls
and strikes We're not getting paid you
know if the house closes we're just
getting paid just a small flat fee and
that's it
So one of the things that I think the
(03:40):
average consumer is confused about is
the difference between a home inspection
and a home appraisal Do you climb up
into the attic do you go underneath of
the house so there are so generally no
Okay Uh there's a big difference So home
inspection is really optional Um I think
most buyers should get a home inspection
(04:02):
Uh but that the home inspection has
nothing to do with the bank So when it
comes to like lending an appraisal is is
really a requirement Um unless you're
putting um x amount of dollars down or
it's just very clear that the property
has a tremendous amount of equity Um for
a VA appraisal uh you do uh in FHA you
(04:23):
do look underneath the house but you're
not really doing you're not doing an
inspection a crawl space inspection Uh
you do peek in the attic Um but again
it's very different I I say an appraisal
inspection mainly we're verifying the
square footage We're uh viewing every
room just to verify characteristics Um
(04:45):
and it's it's a pretty light inspection
Uh like I said a big part of our job is
back at the office running the report um
to compare the properties We're really
more interested in fair market value Um
we're not looking to test every
mechanical system A home inspection will
be there for two or three hours and
they're going to really poke and try to
(05:06):
find holes in any part of the house So
Phil one of the things that I like
working with appraisers one of the
things I like about working with
appraisers is the fact that 34 years in
the mortgage business I've worked with a
lot of appraisers
Some of them
um probably should retire M I I enjoy
(05:28):
working with working with young people
like yourself because I feel like you're
more progressive I feel like that you're
more in tune to the market value and
some of the some of the appraisers that
have been around a while tend to be more
transactional Oh that house on Bow Creek
Boulevard snap a picture slap a price
tag on it
I feel like with your appraisals they're
(05:49):
a little more invasive which they should
be because you're there to protect one
the consumer or maybe I should say one
the mortgage company two the consumer
cuz we're going to protect the consumer
as well What What kind of requirements
educational requirements does it take to
become an appraiser yeah that's a good
question It's so I should also mention
that I'm I am also a realtor as well
(06:11):
right and so uh both professions are are
equally important Uh however the
requirements for for whatever reason to
become an appraiser are much more
stringent than it is to become uh like a
licensed real estate agent Somebody told
me one time that it's harder to become
an appraiser than it is to become a
hairdresser I don't know what the
requirements are to become a hairdresser
(06:32):
to be honest with you but uh I I don't
know Basically u guidelines may have
changed over the last couple years I
don't know Uh but as a general rule of
thumb it's like an apprenticeship So you
have to basically train for 6 to 12
months Um I think you have to do like
over a,000 hours of training Um and
(06:54):
that's 6 months Yeah 6 to 12 months And
you have to train under someone Uh and
then the educational requirements Um I
think there's seven or eight courses you
have to take and then obviously you have
to take like a state licensing test So
continue education Yeah I would say it's
about it took me about a year to get um
fully licensed and at the time that was
(07:17):
like the fastest you could do it So I I
it change it may change state I think it
changes state by state Um but I I'd say
in general it's it's about a 6 to 12
month process Really that's just the
beginning though So you know once you
get licensed you know it's just like
anything else Now you got to get in the
door get the business and like you learn
as you're also learning as you're going
(07:38):
to So you know every day you learn
something new For example I have an
appraisal coming up that has an
ingground pool That's pretty rare in
Hampton Roads for someone's house to
also have an
inground indoor pool Oh Oh okay You
threw me off for a second there I got
you Yeah So an indoor pool in a
(08:00):
neighborhood I don't know where I'm
going to find a home that's sold in the
last 12 months with an indoor pool in a
neighborhood in Virginia Beach Well I
know of two because I financed two in my
career Good One was in Fairfield in
Virginia Beach and one was over there in
Indian River Plantation Well we'll have
to get with you after this Yeah But but
we're talking about significant price
differences Yeah Yeah That's a tough one
(08:22):
Yeah guys See it's not as easy as
everybody thinks it is He just doesn't
go out there and take a picture and and
plug a value in So is there any advice
that you have for home sellers to
prepare their house for appraisals i
know you have probably seen it all
because guys when I get an appraisal I
typically don't look at them unless
(08:44):
somebody on my team says "Steve wink
wink you got to see this one Wait till
you see all the broken down this and
that and the other in the backyard or
the the tall grass or wait till you see
the decorations these people have." Yeah
No that's a good question
Um so I would say a few things It
certainly helps if it's you know
(09:06):
presented well and it's just sort of
easy to get in and out of Um I'd say
from like a logistical standpoint when
we go we're we're just going to look at
the house right so I'm not really
looking to have a drawn out conversation
with a homeowner or even an agent and
it's not about the personality of any
like we're looking at the house and what
(09:28):
the house is worth and what the property
is worth So I would say just you know on
a quick note you know keep dogs out of
the way you know if you can keep the
floor clean a little bit to the extent
that such that we can just walk through
it and not trip over have trip hazards
So there's some basics there
you know if you clean the house great
but at the same time like we're trained
(09:50):
such that if there are some clothes on
the floor or the bed's not made we can
see past that that has nothing to do
with like the value of the property Um I
would say more important things are
probably you know
uh if you're looking to add value you
know updated bathrooms updated kitchens
always help Uh as it relates to like
(10:12):
windows and stuff you know there are
certain items that we have to flag for
safety issues So if you have um you know
a shattered window that's going to be an
issue It has to be addressed by by us
because of the bank uh as a safety issue
So if you have like some windows that
are cracked or shattered I would get
those addressed before the appraisal Um
(10:35):
if you've got super loose handrails or
unsafe handrails or deck boards get
those fixed or addressed because those
are some pretty common issues that will
get flagged Um because the bank doesn't
want to lend the bank doesn't want to
give money out for a house that's got
some safety issues So a couple of
questions that I get from clients um
(10:57):
they'll ask
me is an air conditioner required uh on
an appraisal Um and and my standard
answer is
well heating is and a sink but not and a
stove Mhm But dishwasher air
conditioning is not required as part of
the plan Yeah I mean you could have a
window unit Right Right Uh but yes
(11:20):
correct A you do have to have a stove Uh
even a refrigerator is not a requirement
right uh it's certainly not a dishwasher
I mean that's still kind of a luxury
item right there's a lot of people that
don't have dishwashers Uh sometimes it's
just a space issue Uh and some people
just like to hand wash So uh but yeah
you AC is just I mean it now it will add
(11:41):
some value if you have central heating
and cooling or you have split units Um
but it's not a requirement but you do
need to have um heat and you do need to
have a stove and and uh another question
people often get or ask is you know uh
like clo bedroom count and whatnot Um
it's got to have a window right so if it
(12:03):
doesn't have a window I can't that's
that's like a big closet Okay Wow I just
learned something Yeah So if it doesn't
have a window it's a big closet pretty
much I mean you have to have a safe way
to get out I mean you heard it here Yeah
If you don't have a window you got a big
closet So um so what about another
aspect i noticed that all of the
(12:25):
pictures that you guys send in And guys
an appraisal report is a a literal
report It comes in color It's about 20
pages Yeah it's 20 to 30 pages Yeah All
pictures inside of the house outside of
the house sideyard It's got measurements
on it It's a report It's a valuation
(12:46):
report So but what I noticed is there's
never any family photos in any of the
pictures you guys take What do you do do
you go in and prepare the seller hey get
rid of those pictures off the wall and
or is that the realtor's job yeah No I
don't I mean we don't you know we like I
said I my job's not you know my client
is the lending institution So uh I think
(13:09):
some people do maybe try to well first
off by the time you get to an appraisal
you're typically only a few weeks away
from closing So a lot of people have
already packed their bags Their stuff's
in the garage So I'd say that's one Um
but yeah like we don't really advise
sellers or anything of that nature Um
cuz that wouldn't really be right either
Uh but yeah no I think a lot of times
(13:31):
people are already packed up ready to go
They're just waiting on us to get it
done Uh and then other times you know
people may pull stuff down uh just to
keep the house like as neutral as
possible So So on those rare occasions
and I say rare um because it is one out
of 10 in my opinion that that you do not
find the value is there a dispute
(13:54):
process yeah there's it's called what is
it well there's there's depending on
what loan you get So if like if it's a
VA loan if you're a military buyer uh
that's called the Tide I think it's
called Tidewater Um there but basically
yes you can It's it's called a
reconsideration of value ROV Um bottom
(14:17):
line is if I do the report and let's say
I'm just having a hard time struggling
that the market and the homes around you
are uh supporting the sales price say
it's $10,000 short of the sales contract
because maybe somebody just threw it up
against the wall Yeah I mean it's just
hard to say Like anything we do we have
to justify with data So even if you
(14:42):
might be willing to pay 500,000 for a
house in your neighborhood if all your
other neighbors bought their homes for
390 or 395 I just like I I have to find
a way to justify that And if I can't
then the value will be a little bit
lower You though as the uh consumer you
can do what's called a reconsideration
(15:03):
value Um basically you just work with
your agent and say "Hey here's a few
different comps we want you to consider
Um and then I'll certainly look at it."
You know sometimes I've changed reports
Um I'm only as good as the data that I
have Right So uh listed houses you can't
use Yeah It's got to close It has to be
(15:25):
it has to be a closed sale It can't even
be a pending sale Okay Uh and because
you know and if you've been in the
business for a long time you you know
you know that the deal is truly not done
until it's done And so uh I mean as an
example I had a situation a few years
ago The clo I mean I couldn't it's a sad
(15:48):
situation really but the closing the
buyer had signed their papers on like a
Friday It was a Memorial Day weekend So
that following Tuesday the seller was
going in to
sign at like
noon Memorial Day night the
buyer died Oh drunk driving Oh excited
(16:12):
about the house
Actually the buyer passed away I mean
how the deal completely fell apart So
the thing is uh we can't use a pending
It's got to you know so yes when I'm
comparing any home I've got to use homes
that have sold We try to find homes that
have sold as recently as possible as
close as possible as similar as possible
(16:34):
I wouldn't compare like a 3500 ft house
to a 1500 ft house Um even though you
could make adjustments and stuff like
that it'd be like comparing a a minivan
to like a convertible They're really two
different markets or two different pools
of buyers and demand So yeah Well so I I
(16:55):
think a lot of people nowadays go to
websites like Zillow Yeah Uh I know I
personally do I mean I like like if a
client says "Hey I bought 123 Maple
Street." Yeah I I'll go look at it real
quick cuz I want to know what I'm
dealing with More than anything the
reason why I want to know is because if
it's a rural property I want to know
okay is the guard rails are the
guardrails hanging off the porch you
(17:17):
know are is there I'm looking for things
that the appraiser is going to pick on
And in rural properties we see that a
lot where there's some separation from
foundation or what have you Depends on
the loan type right if it's conventional
loan you're probably going to be okay
But if it's a government back loan
you're not Do you run into many times
where we have where you have to go back
and say "I need you to put a rail on
(17:39):
this um or uh I mean I Yeah The the most
common thing that I've run up against is
not necessarily the handrail fog
windows." Yeah And that's the most
common one that I've dealt with and it's
not that common is really it's those
deck boards uh that are just oh the ones
that are like curled up and well they're
(18:00):
just you could just fall through it Like
there was one that almost like fell
through Um and it's really just those
deck boards that are just soft and
deteriorating That's the that's probably
the most common thing Um I've a couple
like I've noticed a few like shattered
windows Um I don't know This one house
had like just a tremendous amount of
(18:21):
missing siding Uh but the main thing is
is really just these deck boards that
just start rotting away Um but that's
again that's an easy fix That's not that
doesn't have anything to do with the
value It's just you just replace a
couple boards Um and you can either do
it before we go out there in
anticipation that we'll catch it or you
could wait and then if we catch it then
(18:43):
you just have to do it Yeah
or if the home inspector picked it up
and then that's still negotiable with
the buyer and whatnot So um but yeah I
think fog windows for you on a different
loan that matters more Uh t typically
it's it's the handrail it's the the
decking and then the windows are kind of
like the most common things So guys what
(19:05):
you're hearing today is an appraisal is
important It's important to me as we're
loaning you money because let's just use
$500,000 house If you're paying if
you're get a veteran and you're getting
100% financing we're loaning money based
upon a valuation that a third party is
putting on it not the third party real
estate contract the third party
independent appraiser So 100% financing
(19:28):
we want to make sure that that value is
there or if it's a conventional loan
depending on the down payment or some
sort of a government back loan or if
you're a first-time home buyer most
importantly you want that appraised
value because you want to make sure
number one your investment is protected
You don't care about the seller We get
that But you also want to make sure that
the buy the house that you're buying is
a sound investment And there's two
(19:49):
aspects There's the appraisal and then
there's the home inspection which is uh
an optional report Yeah
So let's kind of tow a B tie a bow
around this Why is an appraisal needed
people ask me that all the time I have
my answer What's your answer well
there's a lot of different reasons for
that So just to back up again an
(20:11):
appraisal is an opinion of value right
so you could be an appraiser and you
could have your own opinion that could
differ from mine Ideally they're all
they're pretty close you know because
the way you view things might be a
little bit differently than me and
that's fine So as a as a setup it's it's
an opinion of value Um and and we have
(20:32):
guidelines that we follow Um why is it
needed well it's needed for a lot of
different reasons From a lending
institution again you guys need it
because what you just said you want to
make sure the property is is worth what
you're lending on Um and you guys need
to be in a secure position not just for
you but also for the buyer There are a
lot of other reasons why people need
(20:53):
appraisals and that's a lot of what I do
Um for example I've done several where
you know for estate work Someone passed
away the family's dividing up the estate
Every everyone thinks their house is
worth more than or some people think
it's worth more and some people think
it's worth less Family's got to divide
it up They need someone to come play
referee and say "This is what it's
(21:14):
worth." And then they split it up
Divorce unfortunately is another big one
People are splitting up someone's got to
you know buy that other party out and
they need a third party to come in and
say "Hey this is what's worth and here's
what you need to pay to buy that person
out." So those are um a couple different
reasons A lot of times agents if it's
like a complex property um they'll call
(21:36):
me and say they need help pricing it
because pricing the properties is pretty
important when you want to sell it for
top dollar And so I do a lot of what's
called like pre-listing appraisals Uh
but at the end of the day I think
everyone's especially in the world of so
much information everyone's just trying
to figure out what's my property worth
Right Right And so that's the question
(21:58):
right what's my property worth that's
the question And so um yes a lot of
times the market will tell you but at
the same time before you put your
property on the market you don't want to
overshoot by like 200 grand or something
crazy So you want to be in the right
ballpark And so I think we have we at
least me I provide appraisals for a lot
of different reasons But again back to
(22:22):
lending we're just our client's the bank
and we're here to protect you and you're
there to try to protect the buyer such
that we don't have a situation that we
had in 2008 where people are underwater
Um and you know on that note I would say
Hampton Roads is doing pretty well I
think we're a pretty steady market Um I
don't think you'll see us We don't go up
(22:44):
like Florida but we don't go down like
Florida So I think we're as long Texas
or Texas and some of these others you
know Raleigh and stuff like that So as
long as our military stays here uh and
we have a strong workforce there I think
we'll continue to just be like a steady
incline Um and I'm I'm I'm optimistic uh
about Virginia Beach and Hampton Roads
(23:06):
at large So perfect Uh I think uh I was
just talking to people the other day The
time to buy if you want to buy a house
and that's the right situation for your
your life the time to buy was yesterday
and then the next best time to buy is
today cuz I don't think prices are going
down in general uh in most markets I
don't think homeowners insurance is
going down and I don't think taxes are
(23:29):
going down So go ahead and get your
property while you can
Wow You heard it from the expert the
time the best time to buy was yesterday
If you missed it then you got to buy
today because insurance is definitely
not going down It went up 30% in the
last 12 months Taxes well we already
know taxes never go down Um and then
(23:51):
values very rarely do they decline in
markets like we're in right now Phil
thanks again for coming in today I
appreciate it Guys you heard it from the
expert Phil Hines Hines Appraisal
Service I'm your favorite mortgage guy
Steve Rockefeller here Stay tuned for
the next edition Bye now Thanks for
tuning in Make sure to follow your
favorite mortgage guy on Facebook
(24:12):
LinkedIn and Instagram Have questions or
ready to take the next step reach out at
steveloans.com or call
757301-9776 We'll catch you next time
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