Appraisals

What An Appraisal Entails

An appraisal is, simply, an "opinion of value" by a professional appraiser who visits the home and inspects the size, condition, quality and function of the home. The appraiser will generate a detailed report and will generally use comparisons to the sale prices of similar homes in the area to determine a value of the home that is being appraised--known as the "subject property. Comparisons can be made to square footage, appearance, amenities and overall condition.

An individual home's value can be adjusted up or down in relation to what properties are actually selling for in the neighborhood. For example, a home with 4 bedrooms will generally carry a higher value than a home--in the same area and in roughly the same condition--with only 3 bedrooms. A home that needs exterior painting will carry a lower value than a similar home that has been recently painted.

Why An Appraisal?

A professional appraisal protects both the lender--so they don't lend too more than a property is worth--as well as they buyer--so they don't PAY too much. If a buyer gets into the heat of the moment and offers a silly (too high) price on a home, the appraisal will often flush it out.

Who Does the Appraisal?

The appraisal will be done by a professional appraiser--in virtually all cases one selected by the lender. Unlike a whole-house inspection, where the buyer should accompany the inspector, buyers rarely are present when an appraisal is done. In most cases, the buyer does not even know the appraisal has been done until after it is completed and is in the lender's hands.