A home appraisal is an essential step in buying, selling, or refinancing a property.  

Whether it’s for mortgage purposes, contesting property taxes, or determining a home’s value for sale, appraisers are often called upon to assess the market value of a property.  

Kari Sepnafski, a licensed appraiser with Independent Appraisers, Inc., shares her expertise on appraisals in the latest episode of At Home on the Lakeshore, hosted by UnitedOne Credit Union’s Local Home Loan Experts. 

Who Can Have an Appraisal Done? 

Anyone can have an appraisal done. However, understanding how appraisals work — and who owns the final report — can be confusing for many homeowners and homebuyers. 

Appraisals are required in several situations. They are frequently needed for lending purposes but can also be useful for homeowners involved in divorce proceedings, estate settlements, or disputes with tax assessments. In other cases, homeowners may want to sell their property independently and seek an appraisal to help set an appropriate asking price. 

“From a member standpoint, if we start a (home loan) application and they say, ‘Oh, I just had an appraisal done,’ we can't accept it,” said UniteOne Mortgage Specialist Julie Peot, #441412. “If it was ordered by them personally, it has to be ordered through a lender.” 

A critical element of the appraisal process is understanding the appraiser's client. Typically, the appraiser's primary client is the lender or company that orders the appraisal, not the homeowner.  

“If UnitedOne orders an appraisal, they are the client,” Sepnafski said. “You, as the homeowner, technically, after I'm at your home, if you call me, I really can't speak to you about the valuation in your report.” 

The report is sent to the lender or company that ordered the appraisal, and they are responsible for sharing the results with the homeowner. This professional boundary is vital to maintain ethical standards and avoid conflicts of interest.

What Adds Value to a Home? 

Homeowners often invest in upgrades with the expectation that these improvements will increase their property’s value, but not all upgrades result in a higher return on investment.

“You might love it, but someone else might not,” Sepnafski said referring to features like pools, koi ponds, or fences.

“Some people like open spaces or a lot of trees in your yard, and they love all the apple trees and the hardwoods, and they're beautiful. I am not a forestry expert. I cannot put value on trees or items like that, and someone else might also look at it if they’re in the market and say, ‘I don't want to rake, I don't want to deal with that.’ It could be a negative. So, it's kind of a wash sometimes when it comes to these items.” 

When appraising a property, appraisers must consider the current market and comparable properties, or “comps.” Appraisers look at homes in the same neighborhood with similar square footage and features.  

“I'm not going to try and take a one-acre or two-acre property to a 15-acre property,” Sepnafski said. Those are different markets and sometimes you cannot find a comparable sale.” 

Land and Special Considerations 

Land, especially in rural areas, presents unique challenges in the appraisal process. For example, a larger plot of land may not always equate to a higher value.  

“Tillable land goes for a certain amount, but hunting land or land with an easement is different,” Sepnafski said.  

Additionally, some land transactions occur privately and are not listed on public platforms, which can make it more difficult to determine the market value. 

“Not all land is created equal,” emphasizes Sepnafski. Various factors — such as access, usage, and location — play a crucial role in determining land value. 

Home appraisals are a valuable tool for determining property value, whether for buying, selling, or refinancing. However, it is important to understand the appraisal process, who the client is, and how particular features of a home or land can influence value.  

Sepnafski advises, “Just be smart about it — if you’re getting a mortgage, go through the proper channels.” 

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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