There are a multitude of professional services that help facilitate the homebuying process. Some are well known, like a real estate agent or mortgage lender, but some are more obscure. One essential service that isn’t as commonly known is a home appraiser.
An appraisal might not be the most exciting step in the homebuying journey, but it’s a critical one—having an accurate appraisal value protects both the buyer and lender from investing in an overpriced property.
What is an appraisal and who pays for it?
An appraisal is an unbiased, professional opinion of your property’s fair market value that’s almost always required by a lender. Appraisals ensure that the home is worth the price tag and protects both parties in case of the worst-case scenario—a borrower defaulting on the loan.
Typically, an appraisal is paid for by the person seeking the loan—it’s fair to expect the cost to be between $300 to $500 or even higher.
Why will I need one?
Before granting a loan, a lender must ensure they have an independent, impartial estimate of the property’s value. This professional evaluation is essential during the refinance, selling and buying processes. Although the appraisal visits are largely similar despite the loan type, there is one key difference—the borrower is usually allowed to be physically present during a refinance loan appraisal.
What factors go into a home’s appraisal?
An appraiser will examine your entire property to survey its general condition and compare to nearby, commensurate properties. The industry standard is to measure all rooms’ dimensions, review amenities, note unique characteristics or finishes and visually inspect structural soundness. Depending on the size of the property, this process could take between 30 minutes to three hours.
When does an appraisal typically happen?
Have you found your dream home but aren’t sure when the appraisal should occur? Normally, an appraisal happens early in the homebuying process to ensure the property is a feasible option. After you’ve been approved for the loan, the home will need to be appraised and inspected before the final steps. Here is an outline of the PrimeLending loan application powered by our cutting-edge digital solutions.
- Apply and Gather Financials
- Appraise and Verify Property
- Process and Underwrite Loan
- eClose*
- Settle In and Relax!
Are you curious about the appraisal process from the perspective of the buyer or seller? Connect with one of our PrimeLending loan experts to get the conversation started! We’ll be with you every step of the loan process and answer any questions you might have along the way.
* eClose allows for electronic signing of most (not all) documents prior to closing.
