What is a Home Appraisal?

What is a Home Appraisal?

A house appraisal is a professional opinion of the value of a property. The professional appraiser will look at the house from all angles and determine its worth. This helps lenders decide whether or not they should lend you money for a mortgage.

Home appraisals are important because they provide information about the current state of the housing market. If you want to sell your home, you'll want to get a good price for it. If you want to borrow money to purchase another home, you’ll need a lender who believes the value of the desired home is accurate.

What is an Appraisal?

An appraisal is an estimate of how much a home would sell for if put up for sale today. The purpose of an appraisal is to determine the value of a home based on its current condition. An appraiser will look at your house, inside and out, to determine its current market value.

Your home's appraised value is based on factors like square footage, age, location, number of bedrooms, bathrooms, and appliances. A home appraisal is a way to price your property fairly.

Home Appraisal vs. Home Inspection

The home appraisal process is done to determine the value of the property for the purpose of selling the house. It is different from a home inspection which is used to identify any problems with the structure that may affect the safety of occupants. 

Appraisers establish a market value based on comparable homes. Home inspectors focus on the buyers' needs and wants. They look for problems before buying a property. Buyers often choose an inspection over an appraisal. Though mortgage companies will conduct an appraisal before lending to a buyer to ensure the home they’re mortgaging is worth the mortgage.

Home Appraisal FAQs

Here are the answers to some of the most common questions homeowners have about home appraisals:

What Does a Home Appraiser Look at?

An appraiser uses several different methods to determine what a property is worth. They compare it to similar properties in the area. They also consider the size of the lot, the neighborhood, and other features.

The appraiser looks at the exterior of the house as well as the interior. They check for any damage or defects. They also look for signs of wear and tear. They measure the square footage and count the rooms. They take pictures of the inside and outside of the house.

A home appraiser will look at the condition of the roof, windows, doors, foundation, electrical system, plumbing, heating/cooling systems, and appliances. He or she will take measurements of the property, including the size of rooms, the location of walls, ceilings, floors, and other features. Appraisers look at improvements like new roofs, windows, and appliances.

Neighborhood plays a major role in determining your home's value. An appraiser considers the type of neighborhood, crime rates, schools, and access to public transportation.

What is an Appraisal Report?

The appraisal report should include a detailed list of all features and components of the property. It will also list comparable properties that have recently sold in the area. The appraiser will usually include a value range for the home in the report.

What Can Go Wrong with a Home Appraisal?

There are many reasons why an appraisal can be wrong, and they include:

• Neglecting to gather information on the property – it’s important to consider any previous interactions with the property, including how long it has been vacant, if there have been any remodeling projects that could affect its value, and any other signs of damage or wear and tear. It’s also essential to know if there is any pending litigation against the property.
• Ignoring outside factors that could affect the market value of your home – a rise in interest rates, a drop in the housing market or even a massive wildfire nearby could all impact the true market value of your property. When purchasing a house you should always look for properties in good condition and in areas that are not heavily impacted by these outside factors.
• Failing to make an accurate analysis of comparable homes – it’s important to compare your home to other similar properties before you hire an appraiser. This data can be used to show how much value your home should be worth based on market conditions.

What Home Sellers Need to Know About Appraisals

A low appraisal could mean that you have to reduce your asking price or find another buyer. Your home's value will decrease if there are distressed homes around yours. An appraisal is needed before transferring ownership of a property. The appraisal should be done by a professional appraiser who has been trained in how to properly value homes.

What Does a Home Appraisal Cost?

There are many different ways to conduct an appraisal that will impact the home appraisal process and cost. Some methods may cost more than others. An appraiser will charge a flat fee if he/she expects to be paid a certain amount per hour. A typical appraisal costs between $300 and $450.

What Happens After the Appraisal?

The appraisal is part of the preapproval stage of the home buying process. The underwriter will review the loan application and decide whether or not to approve the loan based on the information provided.

This could mean that you lose money if the home sells for less than the appraised value. If the home is appraised too high, the seller risks losing the deal.

What Lowers a Home Appraisal?

Clutter and dirt don't affect the appraisal directly, but they subconsciously affect the appraiser's mood. Cleaning and tidying up a house can increase its value. Many people don't realize how much they affect the valuation of a house.

How Long Does a Home Appraisal Take?

A home appraisal usually lasts less than an hour. An appraisal includes taking photos of the house, measuring the size of the property, checking out the exterior, and inspecting the interior.

What Determines a Home's Value?

Appraisal values are determined by many different factors. Location, age and condition of the house, size, amenities, and structural integrity are all important factors. Here are some other things that influence the value:

Comparable Properties

Appraisers love data. They want to see comparable properties to ensure that they aren't missing anything important about your home. Don’t assume that all homes in the same neighborhood sell for the same amount.

Location

Home prices vary depending on where you live. Your location matters. A lot. Most people want to live near good schools, hospitals, and other amenities.

Lot Size

A larger home might be worth less than a smaller home if it is located on a smaller lot. The size of the lot also affects the value of the land.

Upgrades

Make sure your appraiser knows about any upgrades or improvements you've made to your home. Don't forget to include things like window replacement and roof repair. A new roof, windows, doors, or siding will increase the value of your house. Damages, defects, and wear decrease the value of your home.

Amenities

The number of bathrooms, bedrooms, and other features add to the value of your home. More rooms increase the overall value.

Age

A home's age may affect its value. Properties that are more than ten years old will sell for less than newer homes in comparable neighborhoods.

How to Challenge a Home Appraisal Report

Home sellers can challenge the appraisal report if their home is under appraised. If you believe that your property should be appraised for more than it is worth, there are several things you can do to increase the value of your property.

Appraisers cannot ignore comparable sales. You can find comparable sales by searching online or going through MLS listings in your area. Take pictures, write down details like square footage and the number of rooms, and make sure that you compare apples to apples when choosing comps.

Keep good records of any additional improvements you've made to your home. Include pictures and receipts for repairs. List out all windows, doors, and other items that are new or recently installed. You might not know it, but these improvements could increase the value of your home. 

An appraisal report is a written analysis of a property’s value, usually requested by a homebuyer or lender. An appraiser will visit the property and analyze several factors such as the condition of the home, current market trends, and nearby sales to determine the property’s value. Appraisers are required to be unbiased, and their reports are not a guarantee of value. If you feel your home is appraised at a value lower than it should be, you can get a second opinion from another appraiser. 

Appraisal Tips for Home Sellers

Sellers can reduce the risk of the property being undervalued by following these tips for appraisals:

• Meet with your appraiser and find out what comparable properties were used, why they were chosen, and if there are any other comps that should be included.
• Don't wait until the last minute to do home repairs. Fix everything that needs to be fixed, especially anything that relates to safety or energy efficiency. Take pictures of all improvements.
• Gather as much information as you can. Give your appraiser plenty of time to review all the information you've collected.
• Remember that comps and neighborhood data change over time. Only review the most recent data available for your area and make sure that it's relevant for your property.

Avoid Third Party Appraisals and Sell Your Home for Cash

In addition to the financial considerations associated with selling your home, you may also have to deal with the costs of repairs or paying for an appraisal if you choose to sell your home through a real estate agent. While these costs vary depending on where you live, it is important that you find out how much an appraisal will cost before you decide whether to sell your home through a real estate agent or directly to a company that buys houses AS IS for cash. You can sell your house AS IS, and sell your house fast.

House Buyers of America will buy your house AS IS and you can sell your house without a Realtor.  You do not need to pay for a separate third-party appraisal first. We buy houses fast. Give us a call to get a price on your house as it is today.