The Appraisal Process
Why is it Necessary?
How Home Appraisals Work
How Home Appraisals Work
The home appraisal is necessary because the lender wants to know what the property is worth. They don’t want to be stuck holding the bag on a property worth far less than the loan they extended on it. The assigned appraiser views and measures the property, completes the market analysis, and determines the value of the home. This is in large part by comparing the subject property to similar properties that have sold recently in the immediate vicinity.
How Home Appraisals Work
How Home Appraisals Work
How Home Appraisals Work
The lending institution through which you are getting your loan will initiate a request for real estate appraisal. The passage of the Dodd-Frank Act has changed the way home appraisals are ordered. The lender has little or no contact with the appraiser until after the work has been performed, so there is no “undue influence” on the appraiser to value the home at a certain price. The cost of the home appraisal is traditionally the buyer’s responsibility. It is typically paid at closing as part of the closing costs.
Inspection of Property
How Home Appraisals Work
Inspection of Property
We will contact the seller’s agent to set up a time for the appraisal process to happen.
During the property inspection, we will walk through the entire home, assessing the condition of the property and noting any upgrades like high-end countertops or appliances. We also note the general condition of the neighborhood.
Comparable Properties
Final Appraisal Report
Inspection of Property
Once we have finished inspecting the home, we pull recent sales information from the MLS or public records. We then compare those homes to the subject property to see how it stacks up against the competition. But not every home has an exact duplicate to pull from. When this happens, we must take into account other factors, such as the ever-popular location, location, location.
Final Appraisal Report
Final Appraisal Report
Final Appraisal Report
Once we've inspected the home and compared it to recently sold properties, we will write up a report, giving our estimate of the value of the home. The report will include which specific addresses we have used as comparable properties to value the home, along with a description of the actual subject property, a map marking the location of the home, a picture of the property, and a general condition of the current real estate market.