Your loan officer tells you that a home appraisal is required before they’ll sign off on the mortgage. Or the shoe is on the other foot: You’re selling a house and a buyer requests a home appraisal. What should you expect?
Whether you’re buying, selling, or refinancing, a home appraisal is a standard part of the process. In this article, we’ll examine why home appraisals are required and what you can expect during the appraisal process.
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A home appraisal looks at your home (or prospective home) and determines its market value. To do this, the appraiser will examine the house and note any other permanent structures ( shed, barn, detached garage, etc.) as well as the land that goes with it. They’ll also look up comparable properties that have recently sold in your area. Using this, they’ll assign a value to the property based on the current market conditions.
It’s good to note that a home appraisal is not the same as a home inspection. An appraiser will conduct a simpler examination; for example, an appraiser might verify that each bedroom has a window and some electrical outlets, while a home inspector would verify that the window and electrical outlets are in good working order.
Usually, the buyer requests the home appraisal as part of the offer they submit to the seller. This is known as an appraisal contingency; if the house’s appraised value is under the asking price, the buyer can negotiate a better price or walk away from the contract.
Home appraisals are required for two reasons:
Home appraisers usually have a checklist of things to visually inspect on your home. These include:
If you’re the home owner (or if you’re refinancing), what can you do to ensure you meet home appraisal requirements? First, make sure everything is clean, tidy, and accessible to the appraiser. Next, go through your home and look for things that don’t work (such as stuck windows) or could use an update (like a fresh coat of paint). Make as many repairs as you can; even small changes will add up.
Buying a home or refinancing your current property can be a confusing process. Fortunately, Mortgage 1’s loan experts are here to make it easier. Call us at 1-866-532-0550 or use our Pro SNAP digital mortgage app to get started.
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