Home Appraisal Guide
A home appraisal is a crucial step in the mortgage process that determines a property's value. This guide explains what appraisers look for, how to prepare for an appraisal, and what to do if the appraisal comes in lower than expected.
What is a Home Appraisal?
A home appraisal is a professional assessment of a property's value. Lenders require appraisals to ensure the home is worth at least as much as the loan amount. This protects both the lender and the buyer from overpaying for a property.
When is an Appraisal Required?
- Purchase mortgages
- Refinancing existing loans
- Home equity loans or lines of credit
- Property tax appeals
- Estate planning or divorce settlements
What Appraisers Look For
Interior Features
- Square footage and floor plan
- Number of bedrooms and bathrooms
- Kitchen and bathroom updates
- Flooring condition
- Signs of damage or needed repairs
- HVAC system age and condition
Exterior Features
- Overall structural condition
- Roof condition and age
- Foundation integrity
- Siding and trim condition
- Windows and doors
- Landscaping and drainage
Location Factors
- Neighborhood characteristics
- Proximity to amenities
- School district quality
- Recent comparable sales
- Local market conditions
How to Prepare for an Appraisal
- Clean and declutter the home
- Make minor repairs and touch-ups
- Prepare a list of recent improvements
- Ensure all areas are accessible
- Gather documentation of updates and maintenance
- Research recent comparable sales
The Appraisal Report
An appraisal report typically includes:
- Detailed property description
- Comparable property analysis
- Market trends assessment
- Photos and sketches
- Value conclusion
- Notes about issues or concerns
What If the Appraisal Comes in Low?
Options for Buyers
- Negotiate with the seller for a lower price
- Make up the difference in cash
- Request a second appraisal
- Challenge the appraisal with additional data
- Cancel the contract (if appraisal contingency exists)
Common Questions
How long does an appraisal take?
The physical inspection typically takes 1-3 hours, with the full report usually completed within a week.
Who pays for the appraisal?
The buyer typically pays for the appraisal as part of their closing costs, though this can be negotiated.
Can I be present during the appraisal?
While not required, you can be present during the appraisal to answer questions and point out improvements.
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