Determine the true value of your property.
A real estate appraisal is an unbiased estimate of the true value of a property. If you are selling your home, a professional appraisal can help you determine the current market value to set a fair price. If you’re buying a property, an appraisal can confirm whether the property is worth the amount you are paying.
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Q: What is a property appraisal?
A: A real estate appraisal answers that intriguing question: What is this property worth now?
A real estate appraisal is an unbiased estimate of the true value of a property. It is best conducted by a licensed, certified professional.
If you are selling your home, a professional appraisal can help you determine the current market value to set a fair price. If you're buying a property, an appraisal can confirm whether the property is worth the amount you are paying.
Q: What does an appraiser do?
A: A state-licensed or certified appraiser has been trained to give an independent estimate of the value of a property based on location, amenities and recent sales of similar properties in the same neighborhood.
An inspection often includes a walk-through to determine the general condition of the property and note any amenities that may add (or detract) value in that area. Often, the appraiser will photograph or sketch the property's layout. If there are any health or safety code violations, the appraiser will list them so they can be corrected before the lender approves a loan.
Q: Do lenders choose the property appraiser?
A: Most lenders require a professional appraisal to determine the current market value of a property before they approve a mortgage loan. Since the property you are financing is collateral for the loan, the bank or other lender won't want to loan more than that property is worth.
Usually, the lender will commission the appraisal, which you are entitled to see. Keep in mind that lenders and broker's agents are not allowed to "up charge" for third party services.
Q: How much does a mortgage appraisal cost?
A: Lenders are required to charge the fee they are charged by the appraiser. Average rates, range from $350 to $600 depending on the size and value of the property. Prices vary depending on region, type of appraisal report requested and the amount of effort required to complete the report.
Drive-by appraisals and updates to existing reports are usually under $275. Lenders are not likely to approve a loan based solely on a drive-by appraisal.
Q: Who pays for the property appraisal?
A: While an appraisal is usually ordered by the lender, the buyer pays the fee as part of his total closing costs. If you are a motivated seller, you could order and pay for a professional appraisal to support the price you are asking and reduce the buyer's closing costs.
Again, be sure to hire an appraiser that has a broad range of lender relationships.
Q: I'm refinancing. Do I need another appraisal?
A: If you are refinancing and the property has been appraised within the past three years, some lenders will be satisfied with a "drive-by" appraisal as an addendum to the original report.
Q: How long does it take to complete a mortgage appraisal?
A: Turnaround time for an appraisal should be within 3-7 business days.
Q: Can an appraisal serve as a home inspection?
A: An appraisal is not a home inspection in which a licensed home inspector or contractor evaluates the structure and mechanical systems (heating, plumbing, air-conditioning, etc.) of a house, from foundation to rooftop.
The appraiser is typically more interested in sales prices (within the past six months) of comparable homes in the neighborhood, the exterior presentation of the property and amenities that enhance the value in that market.
Q: What is an independent appraisal?
A: An estimate of the value of a property that is prepared by an appraiser who has no interest in the property and nothing to gain from a high or low appraisal.