The Appraisal Process: 4 Important Things to Know
A good real estate professional can help walk you through the appraisal process, but you can also go through it on your own if you plan to sell your home yourself. The cost of a typical home appraisal will depend on the state that you live in.
Cost
In some areas, an appraisal is more expensive than in other areas. An appraisal is done by a licensed professional. While some homeowners do hire an appraiser at times other than when buying or selling a home, it’s typically only reserved for when a home goes on the market. However, there are times when the homeowner is looking to refinance the home to lower the mortgage or take out a loan against the equity – so then an appraisal has to be done.
Condition & Location
A home price set by a homeowner doesn’t always accurately reflect the true value. The kind of shape that a house is in can make the asking price correct if it’s been well cared for. A house that’s in need of repairs doesn’t always match the asking price and an appraiser can determine this. This professional takes into consideration where the home is located, what upgrades have been done and the kind of neighborhood and values of the surrounding homes. The purpose of this is because it prevents potential buyers from paying more for the home than its true value. An individual buyer doesn’t want to get upside down in a home price any more than a bank or mortgage company does.
Analysis
The appraisal process lays out the parameters for correctly determining your home’s values. The appraiser knows what the state’s laws are concerning the process. He’ll come out to your house with documentation that he’ll have to fill out. After looking at how many bedrooms and bathrooms your home has, he’ll also measure the square footage of your home to make sure it’s accurately described. He’ll look at the outside of your home and check things like the exterior walls, the shape of the windows and the roof. The appraiser will also look at porches and decks and see if there are any extras that add to the home’s value.
Condition
Inside the home, the appraiser will check to make sure that everything’s in working order. That usually includes running the faucets, flushing the toilets, checking under cabinets for leaks, and marking anything that needs to fixed. He’ll check the appliances, the electricity, the heating and air unit and go up into the attic and out to the garage as well. He’ll provide photographs of your home to back up his analysis of the appraised value. Getting an appraisal done can help make sure that both parties in a sale are aware of any potential issues.
Some homeowners pay for an appraisal before they ever put the home on the market so they’ll know what needs to be taken care of first. Sometimes homeowners are upset when the report comes back more unfavorably than they anticipated. But the appraisal process can help protect you from selling a home with potential hazards just as much as it can protect you from underselling.
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