What is an Appraisal?

Answer:

An appraisal is the estimate of the market value of a piece of property given by an impartial expert.

An appraisal is the estimated of the market value of a piece of property given by an impartial expert.

Typically an appraisal includes references to comparable properties to support the assigned value. When a home is being sold, the buyer usually pays the fee for the appraisal of the property.

Appraisal vs. Inspection

It should be noted that a home appraisal is not the same thing as a home inspection. A home inspection is done in order to reveal any potential problems such as damage caused by termites or other wood destroying organisms, issues with the roof, plumbing or foundation of the home.

An appraisal protects the bank from over-lending to a buyer for a home that is not worth the asking price.

Also, it protects the buyer who probably is not as familiar with all the specific details that can effect the market value of the purchase home.

The process of an appraisal takes the emotional factor out of the sale and allows the lender and the buyer to rely on an impartial party.

Appraisers are certified and licensed by the state in which they work. Many lenders have approved appraisers that are either on staff or that they use as independent contractors.

During an appraisal, the appraiser will evaluate all of the features of a home and typically take the following factors into consideration:

  • The size of the property – larger properties will naturally be worth more
  • The location of the home – is it near a desirable location?
  • The exterior of the home – including the materials
  • The interior of the house – the quality of the interior including the lighting and condition of flooring, walls and ceilings
  • Features and Amenities – such as central air, fire-places, walk-in closets
  • Improvements and upgrades – to the property such as granite counter-tops
  • The value of other homes – that share similar features and are in given radius to the home
If your home is scheduled for appraisal, focus on things that take the least amount of effort to spruce up.
  • Clean and power-wash the exterior and windows
  • Steam clean carpets
  • Update kitchen hardware
  • Apply fresh paint to both interior and exterior walls
  • Plant flowers along walkways
  • Clean the gutters
  • Mow the lawn.

If you have pets, it is a good idea to place them in a carrier, the back yard or send them to the home of someone that you trust during an appraisal.

By | 2015-04-15T22:14:59+00:00 April 15th, 2015|Lending Questions|