What is a Home Appraisal?
If You’re Buying a Home
An appraisal gives you and your lender an estimate of a home’s value and helps make sure your offer, the purchase price, is in line with the home’s fair market value. During the appraisal process, the home is inspected and compared to similar homes in the area that have been sold within the last six to twelve months. While PrimeLending chooses who will conduct the appraisal, this is generally an expense paid for by the buyer. Some things that are considered in the appraisal include:
- Recent sale price of comparable homes
- Square footage
- Number of bedrooms and bathrooms
- Overall condition of property
- Quality of landscaping
- Amenities like swimming pools
- 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
It’s important to note the appraisal is different than your home inspection, which occurs after your sales contract is signed. The appraisal primarily documents obvious visual conditions, along with cost and size comparison to other homes. You typically receive your appraisal report within several days to a week.
If You’re Selling Your Home
Once you have an offer to buy your home, you should expect the prospective buyer’s lender to request an appraisal. To ensure your home is priced favorably, it’s imperative to make sure your home is prepped and ready for scrutiny.
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. While the inside is vital, don’t forget about your yard – mow the lawn, plant flowers and turn up the curb appeal of our outdoor space. 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. The appraiser will analyze your home thoroughly, but here are a few key focuses:
- 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
Are you curious about the appraisal process from the perspective of the buyer or seller? Connect with a Home Loan Expert or call 800-317-7463 to get the information you’re searching for.