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. It helps make sure your offer, the purchase price, is in line with the home’s fair market value. To make an appraisal, 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 of the things that are considered in the appraisal include:
- Sale price of other area homes
- Square footage of the home
- Number of bedrooms and bathrooms
- Overall condition of the home
- Quality of landscaping
- Amenities like swimming pools
- Unique features of the home
- Size and condition of the land the home is on
- Visual inspections of the foundation, plumbing and electrical systems
- Finishing details such as hardwood floors or updated lighting
- Quality of the basement and attic
- Surrounding neighborhood and area
It’s important to know the appraisal is not the same thing as your home inspection, which will occur after your sales contract is signed. The appraisal primarily documents obvious visual conditions, along with a cost and size comparison to other homes. You should receive your report within several days to a week or so.
If You're Selling Your Home
Once you have an offer to buy your home you can expect the buyer’s lender to send an appraiser to inspect the house. Before this happens, you need to make sure your home is ready.
Correct any maintenance or other issues related to health or safety. Make any obvious cosmetic repairs you’re aware of. Get rid of clutter and make sure it’s clean. Prepare a list of recent repairs or renovations for the appraiser, include the dates/costs of the repairs along with receipts. A home that looks cared for will can result in a better and higher appraisal.
Be sure to place pets out of the way while the appraiser is onsite and don't water the yard right before the appraiser arrives. The appraiser will need full access to your home, including the closets, attic and crawl space, etc.
Here are a few of the potential problem areas an appraiser will look for.
- Electric garage door opener not working
- Cracks in the walls, ceiling or foundation
- Leaking pipes
- Roof has less than three years of life remaining
- Water stains on ceilings
- Wiring not up to code
Have questions? Want to learn more about the appraisal process? Contact us online or call 800-317-7463.