What is a Home Appraisal?

March 31, 2017

A home appraisal is an estimate of how much the property is worth. Appraisals are important because no financial institution will lend you the money for your home without an appraisal. The appraisal lets the lender know what the loan collateral will sell for. 

Appraisals are good for a few reasons, but can also be a tense time for the buyer and seller. The appraisal takes place after you have negotiated on a price, agreed to purchase or sell the home and the contracts are signed. So it’s best that the appraisal is close to the price that was agreed upon. The contract should state the possibility that the appraisal comes in below the purchase price, you can terminate or renegotiate the price. The seller usually pays for the appraisal.

The home inspector and the home appraiser are sometimes confused as they both inspect the home but are looking for different things. The appraiser is looking at the value and the inspector is looking for any defects with the home.

The appraiser is looking for key items in the some such as square footage, bedrooms, bathrooms, condition of the home and comparables of recently sold homes nearby. 

The homeowner can take some steps before the appraiser come to do the appraisal. Its very important that you make the property look as good as possible, such as the lawn being mowed, the landscaping should be up to par, the house cleaned and last but not least make sure the lights are turned on and the blinds are all open. It is also helpful if you list all the repairs and improvements that have been done over the last couple of years and provide that list to the appraiser.