What to Expect During a Home Appraisal

Not sure what to expect during a home appraisal? It’s an important step when selling or refinancing your home, and the results can impact the sale or financing. The home appraiser is impartial and is hired to come up with a fair market value for your home.

Keep reading to learn what happens during a home appraisal so you know what to expect.

What Is the Purpose of a Home Appraisal?

The goal of the home appraisal process is to determine the estimated value of the home based on several specific factors. It’s an important part of real estate transactions, including selling and refinancing. The results impact financing for the property.

When the buyer needs financing for the home, the lender needs verification that the home is worth the amount of the loan. The lender won’t give out more money than the home is worth, which can make the deal fall through when you’re trying to buy or sell a home.

If you’re refinancing, the home also needs to appraise for higher than the amount you need. If you’re under water on the mortgage, you probably won’t be able to refinance.

The appraisal can also determine if you have to pay for PMI on the mortgage. If you don’t have at least 20% equity in the home or don’t put down at least a 20% down payment when buying a home, your mortgage will likely include PMI.

Who Is the Home Appraiser?

There are over 78,000 active real estate appraisers in the U.S., all of whom are neutral in the real estate transaction. They don’t represent buyers, sellers, or lenders. Instead, they work independently to reach an appraised value of the property based on a number of current factors.

You can’t choose and hire an appraiser yourself as part of the official lending process. The lender uses an appraisal management company, which is a third party, to hire an impartial home appraiser.

Know What to Expect During a Home Appraisal

Knowing what to expect from a home appraisal can put you at ease. During the home appraisal visit, the home appraiser will walk around the home’s exterior and walk through all interior rooms. They’ll take measurements and photos of the home to document the condition and features.

While you can be there during the appraisal, you aren’t actually involved with the process. Your job is to give the appraiser space to work without interfering with the appraisal. The appraiser might ask you questions about the property or updates you’ve made.

What the Appraiser Is Looking For

Your home appraiser will evaluate the interior and exterior of the home. Many appraisers use a standard form called the Uniform Residential Appraisal Report. It covers details about the property itself and the neighborhood.

From the outside of the home, the appraiser looks at things such as the location, age, structure, property size, and exterior condition. They consider the roof, foundation, gutters, and other exterior features. Parking and the general lot and neighborhood also go into the evaluation.

Inside, the appraiser also looks at the structural integrity and condition of the home. They look at things like code compliance and which utilities are available within the home.

The square footage and layout of the home are also important. The appraiser looks at the number of rooms in the home, especially the number of bathrooms and bedrooms, as well as the size of those rooms.

If the home is in poor condition or you haven’t kept up with routine home maintenance tasks, it can hurt your appraisal value. The goal is to determine how much the home can sell for in the current real estate market, so all of those little things can have a big influence on the value.

Other Factors in Home Appraisals

Beyond what the appraiser sees in your home, the local real estate market as a whole can impact your home’s value. The appraiser takes into account the recent sales of similar homes in your area. The selling price and how quickly similar homes have sold recently can influence the value of your home.

The appraiser considers the location and neighborhood of your home. It factors in the type of neighborhood, such as urban, suburban, or rural, and the current land use for properties, such as single-family homes, multi-family dwellings, and commercial properties. The current market in the neighborhood, including whether property values are increasing or decreasing, the growth, and the average time on the market, also plays into your home’s value.

How to Prepare for a Home Appraisal

If you’re wondering how to prepare for a home appraisal, start by deep cleaning and tidying up the home to make it look as presentable as possible. Don’t forget to clean up the outside of the house as well since the exterior factors into the value. If the home looks unkempt or messy, the appraiser might assume you don’t take care of the home in general, which can hurt the value.

Doing a few touch-ups and minor repairs can also help. Touching up paint or patching small holes are examples of minor repairs that are easy to do and can help with your appraised value.

If your home is in poor condition, these tips can help you prepare for the appraisal and the sale. Making some minor repairs can be worth it, but major repairs are often time consuming and expensive. You’ll need to decide whether or not those repairs are worth it before the appraisal.

How Long Home Appraisals Take

The home appraisal usually takes place early on in the home sale or refinancing process. Some buyers put in a home appraisal contingency as part of the home offer. This requires that the appraisal happens within a set time period.

In busy real estate markets, you might have to wait several days or weeks to get on the appraiser’s schedule. The amount of time the appraiser spends at the home can vary from as little as 15 minutes to as long as a few hours. The size and complexity of the property play into how long the actual appraisal takes.

Once the appraisal happens, you’ll still need to wait longer for the results. Getting the appraisal report back can take up to a week or longer since the appraiser has to evaluate the information and look at the comparable homes.

Understanding Home Appraisals

Knowing what to expect during a home appraisal can put you at ease leading up to the visit. It can also help you prepare to maximize the value of your home for better appraisal results.

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