Understanding Home Appraisals
WHAT IS A HOME APPRAISAL?
A home appraisal is a professional assessment of a property's market value conducted by a licensed appraiser. It is a crucial step in the homebuying process, providing both buyers and lenders with an unbiased estimate of the property's worth. Appraisals are typically required by lenders to ensure that the loan amount does not exceed the home's actual value, protecting both the lender and the buyer from overpaying. This guide will walk you through the essentials of home appraisals, including how they work, what factors influence them, and how to navigate the appraisal process successfully.
HOW DOES THE HOME APPRAISAL PROCESS WORK?
Understanding the appraisal process helps you anticipate the steps involved and prepares you for what to expect during this critical phase of the homebuying journey.
Order the Appraisal: After your offer is accepted and you’ve secured financing, your lender will order an appraisal from a licensed appraiser. As the buyer, you are responsible for covering the appraisal fee, which is included in the closing costs.
Appraiser’s Visit: The appraiser will visit the property to conduct a thorough inspection. This includes evaluating the home's interior and exterior, taking measurements, and photographing the property. They assess elements such as the home's size, layout, condition, and any notable features. The appraiser will typically visit the property alone or be accompanied by the home owner.
Research and Analysis: Following the inspection, the appraiser will research comparable properties (comps) that have recently sold in the area. This data helps determine the property's market value based on factors such as size, condition, location, and features.
Appraisal Report: The appraiser compiles their findings into a detailed report, which includes the estimated market value, property description, and analysis of comparable sales. The report is sent to the lender, who will then share it with you.