What You Should Know About Your Home Appraisal Service
Appraisals are a critical part of any mortgage-related process, including buying and selling a home. They determine how much your house is worth based on the current market, and they also serve as the basis for calculating the amount you’ll need to borrow to cover the purchase price.
You can get a home appraisal at any stage of the mortgage process, from when you’re applying for a loan to refinancing your existing one. You can even have your house appraised before you put it on the market, to help you decide a realistic asking price.
A home appraisal is the most important part of any mortgage transaction. It can either make or break a deal, so it’s important to understand how it works and what it means for you.
How It Works
A licensed real estate appraiser, who has an expert understanding of local market trends and the characteristics of homes, will evaluate your property, tour it, and look for comparable properties in the area that have recently sold. Then, they will compile all the data and provide you with a detailed report of their findings.
What They Look At
A home appraiser will first take a thorough tour of your home and carefully examine all the rooms, features, and components. They will also note any major issues, like water damage or mold.
They will then find similar homes that have recently sold in your neighborhood, or nearby, and compare their prices to yours. These are called “comps” and are the most common way appraisers determine your home’s value.
These aren’t the only things that influence a property’s value, though. Other factors include a home’s location, improvements it has made, and market trends.
Ideally, you should work to improve your home’s curb appeal and other aspects that will increase the appraised value. This can include sprucing up the yard, replacing dated appliances, and adding energy-efficient features, such as central air conditioning instead of individual units in each room.
You can also make a list of any upgrades you’ve made to the home and share it with your appraiser, since this will be an important factor in determining its value.
Some of these changes, such as a fresh coat of paint and new bathroom vanities, can have an especially big impact on the home’s value. Other things, like installing an energy-efficient stove and switching to eco-friendly lighting and windows, might have less of an impact on your home’s value, but they’re still important.
The cost of a home appraisal can vary from lender to lender, but it generally includes the services of a licensed appraiser who will assess your property and create an evaluation report that provides fair market value for your home. The appraisal fee is typically included in your total loan amount, but you may be required to pay it ahead of closing as well.
It’s best to have your home appraised before you make an offer on a home. This can help you set a reasonable purchase price and give you more leverage when it comes time to negotiate.
