Your loan officer tells you that a home appraisal is required before they’ll sign off on the mortgage. Or the shoe is on the other foot: You’re selling a house and a buyer requests a home appraisal. What should you expect?
Whether you’re buying, selling, or refinancing, a home appraisal is a standard part of the process. In this article, we’ll examine why home appraisals are required and what you can expect during the appraisal process.
What Is a Home Appraisal?
A home appraisal looks at your home (or prospective home) and determines its market value. To do this, the appraiser will examine the house and note any other permanent structures (shed, barn, detached garage, etc.) as well as the land that goes with it. They’ll also look up comparable properties that have recently sold in your area. Using this, they’ll assign a value to the property based on the current market conditions.
It’s good to note that a home appraisal is different from a home inspection. An appraiser will conduct a simpler examination; for example, an appraiser might verify that each bedroom has a window and some electrical outlets, while a home inspector would verify that the window and electrical outlets are in good working order.
Usually, the buyer requests the home appraisal as part of the offer they submit to the seller. This is known as an appraisal contingency; if the house’s appraised value is under the asking price, the buyer can negotiate a better price or walk away from the contract.
Why Home Appraisals Requirements Exist
Home appraisals are required for two reasons:
1. For your mortgage company, to ensure that the property is worth at least the amount they’re lending you.
2. For your state property taxes, which are based on the value of your home.
What Happens During a Home Appraisal?
Home appraisers usually have a checklist of things to visually inspect on your home. These include:
· The overall condition of the house’s exterior.
· Whether there is any visible damage (i.e., cracks in the foundation, missing roof shingles, etc.)
· Lot size or acreage.
· Landscaping (if any) and outbuildings.
· The overall condition of the house’s interior.
· The number of bedrooms, bathrooms, and other rooms.
· Appliances and heating, ventilation, and cooling equipment.
· Type of home finishings (e.g., flooring type, kitchen counters, etc.)
· Any upgrades or remodels done by the owner.
If you’re the homeowner (or if you’re refinancing), what can you do to ensure you meet home appraisal requirements? First, make sure everything is clean, tidy, and accessible to the appraiser. Next, go through your home and look for things that don’t work (such as stuck windows) or could use an update (like a fresh coat of paint). Make as many repairs as you can; even minor changes will add up.
Mortgage 1-Jackson Can Help You Navigate Home Buying or Refinancing
Buying a home or refinancing your current property can be a confusing process. Fortunately, Mortgage 1-Jackson’s seasoned Loan Officers are here to make it easier. Call us at 517-315-4626 or use our Pro SNAP App at www.mortgage1jackson.com to start the process today!!