Art Of The Home Appraisal
Whether your dream is selling your home or buying a new one, it all starts with an appraisal. We’ll admit, it can be a complicated process, but we’ve got your back! Here’s the low down you need on home appraisals, so you can put your dream pursuit into action.
So What Exactly Is a Home Appraisal?
A home appraisal is an estimate of your property’s value, based on factors like age, condition, building materials, neighborhood, and sales of comparable nearby homes. Using these and other factors, the appraiser provides an analysis and conclusions about your property's value.
The home appraisal report usually includes:
- A street map showing the appraised property and comparable sales used
- An exterior building sketch
- An explanation of how the square footage was calculated
- Photographs of the home's front, back and street scene
- Photographs of each property used as a comparison
- Other information that the appraiser uses to determine fair market value, such as market sales data, public land records and public tax records
Who Performs Home Appraisals?
Introducing — the appraiser. Appraisers are third-party certified or licensed contractors hired by the lender. While they should be knowledgeable about real estate values, federal regulations also require them to be impartial and have no direct or indirect interest in the transaction. Don’t be shy – it’s always OK to ask the appraiser if they’re certified and if they deal with more than one lender. If the appraiser only works with one other lender, they may have outside interests — which could lead to an incorrect assessment.
What Does The Home Appraiser Actually Do?
A visit from the appraiser usually looks like this:
- They’ll walk through the property and run through a checklist identifying the value of the home and items that alter that value — which can either shift it up or down. You’re encouraged to walk with them — you’ll learn a lot!
- They’ll review recent sales of similar properties and current market trends.
- They’ll assess the home's amenities, number of bedrooms and bathrooms, floor plan functionality and square footage.
- They’ll take note of conditions that adversely affect the property's value, such as needed repairs.
- They’ll take photos of your home and property’s layout.
Who Pays For Home Appraisals?
The buyer usually pays the fee at closing, although the seller can opt to pay it up-front. Typically, appraisals cost a few hundred dollars, although the property value, location and size can impact that cost.
How Long Do Home Appraisals Take?
A typical property assessment takes a few hours—and if you’re a buyer, you’re encouraged to stick around since it’s a great opportunity to learn more about the house! The reports can be expected within seven business days, though a busy market can slow turnaround times. The appraiser provides the final report to the lender, who will share it with the buyer.
Buying, selling or refinancing? Discover what the implications of home appraisals can mean for your unique situation here.