What is a Home Appraisal and How Does it Work?
Abstract
What Exactly is Home Appraisal? Home appraisers are licensed and certified professionals who a lender and/or bank hire typically through a 3rd party company to assess a home's value before dishing out the necessary cash to make the purchase. If an appraiser evaluates the home and property and tells the lender that the home is really only worth $385,000, the lender will expect that difference be made up by either the Seller reducing that sale price. During an appraisal, there is an inspection that takes place where the appraiser will review the exterior and interior of the home and make note of any safety issues or concerns, along with features of the home like how many bedrooms, baths, etc. Appraisers will take note of the purchase prices of similar homes in the area and conduct a thorough research about recent listings to determine an appropriate price for the home relative to similar homes in the area. An appraiser could also decide that they need to take a cost-basis approach to valuing the home, which means they would estimate the cost of what it would take to build the home in the present day and combine that with the estimated value of the land. The second appraisal cannot be used by the lender to prove the home's real value but may help make your case if battling the primary appraisal. How a Real Estate Agent Can Help Through the Appraisal Process If home appraisals sound like a headache, do not let this discourage you from embarking on your exciting home buying or selling journey.
