A home appraisal is the reality check that ensures a property's price matches its true value.  
 
It’s a critical step that can influence everything from loan approvals to sale negotiations — so understanding how it works is key to making informed decisions. 
 
Kari Sepnafski, a licensed appraiser from Independent Appraisers, Inc., provides insights into the world of appraisals on the latest podcast episode of At Home on the Lakeshore hosted by UnitedOne Credit Union’s Local Home Loan Experts. 

What is a Home Appraisal? 

"An appraisal is when you have a professional in the appraisal industry — not a real estate agent — give you an objective assessment of the value of your property,” Sepnafski said. “It’s really an opinion, but it’s based on data and research pulled from the local market to give you that information.” 
 
A key difference between an appraisal and a home inspection is the focus.  
 
An inspection evaluates the property’s condition and safety, including checking the home’s structure and systems, to outline possible hazards and areas that need attention to be fixed. 
 
An appraisal is done to determine a value of the home based on similar properties and houses in the market. The condition of walls, flooring, cabinets, roof, siding, windows, and other aspects of the home are taken into account during the appraisal process. 
 
“I'm getting as much as I can from a visual inspection of what the condition of these materials are, and if it is just an average,” Sepnafski said. “It's like what every other home is, or if you've gone above and beyond. Maybe you've made some updates in the last three years. Or sometimes the way people live are deteriorating their property and I have to note that as well.” 

Understanding Room Counts and Bathroom Classifications 

Living space and room counts on an appraisal can cause confusion when homeowners and homebuyers review the report. 

“I don't make the rules,” Sepnafski said. “I just have to follow these guidelines. So, in an appraisal report, it's called gross living area. And that's everything that is above your foundation or basement and up your first floor or second floor. That's the room count of your home.” 
 
A bedroom on a second floor cannot be counted as such in an appraisal if the ceiling is sloped.  
 
“It has to have a minimum ceiling height of seven feet. If it's less than 7 feet, I can't call it finished space,” Sepnafski said. “You can use it, but I can't call it that.” 
 
Bathrooms in an appraisal also have their own distinctions outside of the realm most people are used to. 
 
“A three-quarter bathroom has a shower, sink, and toilet. It’s considered a full bath in an appraisal report, even if it doesn't have a tub,” Sepnafski said. 
 
“A half bath, people would think .5 or half, but it's really a .1 if you're looking at your room count in an appraisal report because if I had two half baths in my main living space and I did point .5 and .5, that adds up to 1, but that's not true.” 

The Importance of an Objective Home Valuation 

Ultimately, an appraisal is an impartial process where appraisers like Sepnafski provide a well-researched opinion of a home’s market value.  
 
Understanding the details of the appraisal process can help homeowners feel more confident as they navigate the buying or selling process. 
 
“I'm telling (homeowners) my opinion of their biggest investment, and sometimes that just in itself doesn't sit well or ruffles feathers because it's your mansion,” Sepnafski said. “You put a lot into it and it's invaluable to you, but I am unbiased and I do not have an opinion and I'm just looking at the market. But if I'm explaining what I'm doing, they might not be happy with the number, but at least they'd know what I was doing and why I was doing it.” 
 
As is the case with any type of home loan, it’s best to discuss your situation and options prior to putting in an offer on a house. The Local Home Loan Experts at UnitedOne Credit Union will help you navigate the process and are your trusted source in Manitowoc and Sheboygan for all your home loan needs.? 

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