What is a home appraisal?
One of the key steps involved in buying and selling a house is the home appraisal. When a mortgage is involved in the purchase, lenders generally require the home to be appraised, and this step is usually done about halfway through the escrow process following the home inspection. Here’s a little bit more information on what a home appraisal is and what you can expect for it.
Home Appraisal Basics
A home appraisal is done by a licensed appraiser. Basically, they’ll come out to the property and look over it from top to bottom, as well as look at comparable homes that have recently sold to come up with an opinion of the home’s value.
On the other end, lenders want to see an appraisal to help assess the risk they’re taking on through giving the buyer a loan. If the borrower was to default on their loan, the property would serve as collateral (so the lender wants to be sure the loan matches up with the value of the property).
How much is a home appraisal?
In general, home appraisals typically cost around $300 to $450, usually paid for by the home buyer. But keep in mind that this can vary by city/state and can also cost more for larger properties, so just use this as a baseline.
What does a home appraisal look for?
When a home appraiser comes out to conduct the appraisal, they generally look at a few things to determine the value of the home, including:
Market trends in your area
Neighborhood and comparable homes
Characteristics and sale prices of similar homes that have recently sold
Age of the property
Building materials
Overall condition of the property
Home amenities
Any improvements or upgrades to the home
How long does a home appraisal take?
There are a few aspects of the appraisal that can delay the process (such as the size or complexity of the property or the current market), but usually the home appraisal will be completed within a few days.
Here are some of the steps involved with the appraisal:
Lender orders the home appraisal
The appraiser goes to the property and completes the report on the home
The appraiser looks over comparable properties that have sold recently
The appraiser completes the full appraisal report using the data they’ve gathered and sends it to your lender
How long is a home appraisal good for?
In general, home appraisals are good for about 90 to 120 days. If for some reason you don’t close on your home during that timeframe, most lenders will require another appraisal to be done. But again, this can vary by city and state, your lender, and different loan types, so be sure to check with your lender to see how long they consider the home appraisal valid.
What to Do Before a Home Appraisal
Just like when you’re preparing for showings of your home, there are a few things that are helpful to do before a home appraisal is done.
Tidy up
Make sure you’ve taken care of any pest issues
Clean up the yard (curb appeal is important!)
Make any cosmetic updates (such as touching up paint)
So, there you have it: home appraisal basics all wrapped into one! Hopefully this helps answer some of the common questions around home appraisals, but if you do have any other questions about the process, I’m happy to help. You can send me a message here or message me on social media (my links are below)!
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