In the real estate industry, an appraisal is a valuation of property by a licensed individual called an appraiser. It is an important step in the loan application process as it reassures the lending institution (and you!) that the home is actually worth the price you're going to pay.
Who does the appraisal?
An appraiser is an independent third party individual who is licensed with the state. He or she can have no financial connection with the property, so the valuation process can be as objective as possible.
The buyer is typically responsible for paying for the appraisal.
Why do you need an appraisal?
Most lending institutions require an appraisal to confirm that the home is worth what you are going to pay. If it isn't, then the home isn't sufficient collateral for the loan and you will need to make up the difference in cash or renegotiate with the sellers. The valuation will also give you the peace of mind that you are paying a fair price.
What factors into an appraisal?
Appraisers consider many factors when completing an appraisal report. First, the collect the property details and compare the property to three comparable properties in the area that recently sold, called comps. They then consider location, condition of the home, and the current market to determine how the home stacks up in comparison.
What do appraisers look for?
How long does an appraisal take?
The appraisal process is made up of three steps:
The physical visit takes a couple of hours depending on the size of the home, and the report is usually completed in about seven days.
Search every listing on the MLS and see only the homes that match your criteria when you create a custom search using our advanced search tool, or use the map tool to draw the location you'd like to buy in.
Not sure where to start? Contact us and we will connect with a local specialist to help you get started.