When you are purchasing a home, it is important that you receive the fairest sales price possible. Often, the price set by the seller is not the price the lender feels is accurate for the home. That is why lenders hire an independent home appraiser.
The appraiser's job is to determine the current market value of the property. They will conduct many tasks on site such as room-by-room walkthroughs, property walks, and additional reviews of the property. A few key features of the home that the appraiser will be interested in are:
- Property size - The appraiser will consider the overall size of the home in their valuation. The number of bedrooms and bathrooms in addition to the home's square footage will also be considered in the value.
- The home's exterior - The appraiser will thoroughly review the exterior of the home as well as the surrounding property. This involves examining the home's structure, foundation, siding and roof to determine the materials they are made from and what condition they are in.
- The home's interior - The appraiser will thoroughly review the interior of the home and will note the materials used for construction. Not only will the appraiser examine the main construction such as the walls, flooring, windows and doors, but they will also look carefully at light fixtures, kitchen appliances, and plumbing.
- Home improvements - Improvements made by the seller since purchasing the home are also taken into consideration. The appraiser will pay close attention to upgrades made to the home as they may greatly affect the value.
- Extra home features - Any extra features of the home such as a swimming pool or outdoor kitchen will also be examined by the home appraiser and possibly added to the value.
The appraisal usually takes one or two hours to complete. After the appraisal report is completed, the buyer will receive a copy of the report that states the property conditions and the appraiser's assessed value. The appraiser is usually chosen by the lender and should be licensed by the state or other certification organization. The loan agreement generally contains a set value range for the appraisal of the property, which is a fee paid by the buyer as part of the closing costs.
A home appraisal is a good investment of your money and effort. As the buyer, it is in your best interest to know the home's value compared with similar homes in the market, and it is required to receive your home loan approval. When you are ready to purchase a home, I would love to help you look at your buying options. Call me today to set up an appointment!