The What’s What On Appraisals
- 2 min
What you'll learn.
- Learn what appraisals are.
- When appraisals take place.
- What appraisers look for.
Appraisals are a way of grading a home’s value. They provide you with important information on the property you’re about to call home. If you’re buying a home your lender will require that an appraisal is performed by a third party to ensure unbiased results on the true value of your home!
Your lender will arrange for an appraisal before they issue a mortgage because they want to protect their investment. If the market value of a property is lower that sales price, then they buyer ultimately will default on the mortgage. So, let’s dive into the details.
What does the appraiser look for?
Appraisers are tasked with looking at the condition of the home, they aren’t looking at the glitz, glamour or furniture but what’s actually permanent in the home. They check on physical characteristics of the home, age, bedrooms and baths, location, square footage things of that nature. Is there water or mold damage? What shape is the plumbing in? How is the roof and other structures within the home?
It’s important that the appraiser evaluates the comps in the neighborhood, what are the prices of recent home sales in that area, how much did they buy for, sell for, etc.
A final report of the home’s true value will be prepared for you to look over with us.
When does this happen?
The appraisal process takes places after an offer has been made on the home of your dreams. That’s next up after an inspection. The appraisal and the inspection are two different courses of action, but both need to be made in the purchase of a home.
Simply put, the appraisal determines the value as you’ve read above while the inspection determines the condition of a home. What does this mean? The inspection you set up yourself and you’re actually encouraged to go through the inspection of a home with whomever you decide to hire. A home inspection only examines the condition without taking the other features of the home into account.
What happens after it’s appraised?
Hopefully, you’ll get good news on that report from the appraiser. Good news would be an A+ if all looks well. That report will have a monetary value of your potential new home! If this is the case, then we will continue towards next steps on your homeownership journey. Please note: if you don’t agree with the appraisal there are other avenues we can take together to get another appraisal.
Together, we will get your loan into underwriting and then it’s off to the closing table! While an appraisal might seem like just another hoop you have to jump through towards homeownership, it’s a crucial one.
Making sure the home is worth it both for you and for your mortgage company is important. We’re happy to assist you along the way. If you have any other questions, we’re here to help.