Getting a home appraisal is a key part of your mortgage process. In fact, lenders require an appraisal to be completed before they will approve any loans. Here’s what you need to know about the home appraisal process.
How much is my home worth?
One of the easiest ways to get a rough of idea of a home’s worth is to compare it to similar properties in the area. You can also contact an appraiser and have them complete a home appraisal to give you the value of your home or a home you plan to purchase.
If you do choose to conduct your own appraisal, keep in mind that this appraisal cannot be used for a mortgage loan and your lender will not be able to use that appraiser. To find the estimated value of a home without getting an appraisal, try checking a home’s value with an automated valuation model (AVM), like the “Zestimate” on Zillow.
What is an appraisal?
An appraisal is an evaluation of a property by an unbiased third party to determine the fair market value of a home. A home appraisal is required when a mortgage is involved in the purchase, refinance, or sale of a property. Since an appraisal determines the value of the home, it is done before a borrower is approved for a mortgage. It’s important to note the appraisal is different than your home inspection, which occurs after your sales contract is signed.
How long does an appraisal take?
The duration of your appraisal depends on the size of the property. Often, the on-site inspection of the property can take between 1-3 hours. However, when the appraiser is done with the on-site portion, they will need to complete the appraisal report which you can expect to be delivered to you within several days to a week of the initial home appraisal visit.
What do appraisers look for?
It is an appraiser’s job to evaluate your home’s obvious visual conditions and document the cost and size comparison to other homes in the area that have been sold within the last six to 12 months. Here is what home appraisers may look for based on whether you are buying or selling a home:
- If you are buying a home:
- Recent sale price of comparable homes
- Square footage
- Number of bedrooms and bathrooms
- Overall condition of property
- Unique characteristics
- Lot size
- Visual inspections of the foundation, plumbing and electrical systems
- Finishing details such as hardwood floors or updated lighting
- Size and quality of basement and attic
- Surrounding neighborhood and area
- If you are selling a home:
- Water damage
- Faulty wiring
- Plumbing issues
- Working utilities (air conditioning and electricity)
- Structural damage (cracks in foundation, uneven floors, crumbling concrete, termites, etc.)
- Defective electric garage door and opener
- Leaking pipes
- Damaged roof
The top priority should be ensuring all safety equipment, like a smoke alarm, is up to code. Walk through your home with a critical, impartial eye and fix any obvious cosmetic damage. This evaluation largely boils down to aesthetic appeal – meticulously clean and declutter all areas of your home.
Compose a list of recent repairs or renovations for the appraiser including the dates/costs of the repairs along with receipts – a home that’s clearly been nurtured will result in a better, higher appraisal. The appraiser will need full access to your home, including closets, attics and crawl spaces. Set yourself up for success and ensure there are no pets or people in the way while the appraiser is on site.
How long is an appraisal good for?
How long your home appraisal is good for depends on your lender and your loan type. For instance, at PrimeLending, we will honor appraisals from their effective dates as follows:
- Conventional appraisal—Valid for 12 months as long as an update or completion report (1004D) or recertification has been completed prior to 120 days.
- FHA appraisal—Valid for 180 days as long as the case number is still active and a 1004D or recertification has been completed prior to 120 days.
- VA appraisal—Valid for 6 months
- USDA appraisal—Valid for 150 days, but may be extended to 240 days with a 1004D update or recertification prior to 120 days.
Are you curious about the appraisal process from the perspective of the buyer or seller? Connect with a home loan expert to get answers to all your home appraisal and mortgage questions.
Product info as of 1/5/24, subject to change.
