No matter if you’re purchasing a home or selling your home, obtaining a home appraisal is a key step during the transaction. While home appraisals help lenders confirm accurate sales prices, sellers can benefit from receiving the best and most precise price for their homes.
Whether you’re an owner, seller or buyer, it’s critical you understand what the appraisal process is and how appraisers determine your home’s value. Here we explore the top frequently asked questions about the appraisal process:
What Are Home Appraisals?
Home appraisals are in-depth and accurate evaluations of your home’s worth. Typically, appraisers boasting prowess in the field of work, necessary licenses, and skills will analyze the exterior and interior features of your home.
An appraisal includes a plethora of factors including your home’s age, size, floor plan functionality and bathroom and kitchen appeal.
Why Are Home Appraisals Important?
Home appraisals are necessary when purchasing, selling or loaning a property for the following reasons:
Accurate home appraisals offer a precise evaluation of your property’s value. In this way, mortgage lenders can ensure that the lending organization doesn’t allow homebuyers to borrow more than the home’s worth.
Home appraisals also help protect homebuyers from spending more than what’s necessary on a home.
If homeowners are planning to put their house on the market, a pre-listing appraisal can help them get a better understanding of the latest market values. In this way, you can determine a realistic possible asking price. Ultimately, it helps the chances of a fast and successful sale.
When homeowners plan to refinance their home, it means that they’re planning to replace their old mortgage with a newer, better one. Home appraisals are critical to ensure your new mortgage is an accurate and justifiable price.
In case you want to score other loans like cash and business loans, you’ll have to utilize your home as collateral. In this way, the bank makes sure the current value of your property supports the loan provided.
When Does the Appraisal Occur and Who Has To Pay For It?
The appraisal kickstarts as soon as the seller accepts the buyer’s offer. Although, if you’re planning to refinance your home, the appraisal will become part of the loan processing. In such cases, the appraisal will take place before the final approval.
Typically, appraisals may last anywhere between twenty minutes to several hours depending on your property’s size.
When it comes to who has to pay for the appraisal, home buyers may have to pay a minimum of $450 to $550 to receive a credible and precise home appraisal. However, keep in mind that if the appraisal is for a mortgage refinance, the homeowner has to pay for it.
How Are Homes Appraised?
During home appraisals, an expert and licensed appraiser will conduct an in-depth and comprehensive inspection of your property.
Here, appraisers will gauge a variety of different components of your home, current housing trends, neighborhood demographics, utilities, the size and age of your property, and whether your home matches the neighborhood’s appeal or not. Let’s take a closer look at what professionals look for during appraisals:
How to Ensure You Receive the Maximum Appraisal Value for Your Home
It’s always a good idea to do some research beforehand to prepare yourself for the appraisal process. If the whole process goes smoothly, you can enjoy selling or purchasing your dream home. On the flip side, if you receive an appraisal that’s lower than your prediction, you may cancel or delay the transaction.
No matter the circumstance you find yourself in, a basic understanding of how the appraisal process works will prove to be useful when you’re making your first purchase.