What Is a Home Appraisal?
A home appraisal is an important process that helps determine the value of a home. The process is a comprehensive one, and the appraiser takes into account multiple factors to come up with an accurate value. Appraisers also help buyers and sellers refinance a home loan. Obtaining an accurate appraisal is essential for both parties involved.
Before hiring a professional to perform a home appraisal, make sure that you understand what the process involves. First, it is important to visit the home and take note of its condition. Pay special attention to the aesthetic appeal and functional needs of the house. Oftentimes, a professional appraisal will highlight things that are not readily visible.
Another important part of a home appraisal is the comparison of similar homes sold in the area. The appraiser will examine condition, improvements, and potential income to determine what a home is worth. Usually, appraisers will look at three or four comparable sales. If there aren’t any nearby sales in the area, they may need to expand their search area.
If the home appraisal comes back low, a seller may be hesitant to negotiate the price. This can result in a lower offer from the seller, forcing the buyer to make up the difference. However, a home buyer can try to bargain with the seller and request a lower price. However, this can be a tricky road to take in a sellers’ market.
Other factors that affect home values include the neighborhood. Appraisers consider whether the area is safe. For example, if the home is located near a shopping center, it will increase its value more than if it is located in an area where there is a high crime rate. Also, the appraiser will evaluate whether the neighborhood has a police station or fire station. In addition, they consider whether the house is located in an urban or suburban area.
An appraisal is essential for the approval of a home loan from a mortgage lender. Lenders will not lend money for a home that is worth less than the appraised value, as they risk losing money in the case of a foreclosure. Home appraisals are usually covered by the home buyer, but the seller may also pay for the process.
In person home appraisals can take a couple of hours. However, a complete home appraisal process can take several days to a week, depending on the appraiser’s schedule. Once the appraisal process has been completed, the appraiser will prepare a written report. It will be on the Uniform Residential Appraisal (URAR) form and will be submitted to the lender for underwriting approval.
If you disagree with the home appraisal, you should contact the lender and request a second appraisal. While a second appraisal cannot serve as proof of the value of the home, it will help make the case against a low appraisal.