What is done during a home appraisal for a mortgage?

When you are seeking out a mortgage, you will need a home appraisal so that the lender knows how much should be lent for the home. This is true whether you are buying a home or getting a refinancing of the mortgage you already have. A big part of the transaction of buying a home is the amount determined by the home appraisal. The buyer usually pays for the appraisal, and it isn’t an expensive part of the process.

Home Appraisals

Getting a home appraisal is a way to get a professional opinion on the value of a home that is not biased. Appraisers must be licensed in all 50 states, and they have to be highly familiar with the area in which they are appraising. If a mortgage is involved in the transaction, an appraisal will always need to be done to come up with the fair market value for the property. The home appraiser must be qualified and licensed to carry out the appraisal.

The appraiser will go to the property in person to take a look at it and inspect certain areas of the property. The appraiser will also do some research on the property and other properties that have recently sold in the area that are similar. They will also look at the market trends in the current housing market and the location that the home is in.

The appraiser will do a careful inspection of the home and learn about its size, amenities of the home, floor plan, and any special features that it has. All of these factors together will allow them to come up with the market value of the home.

If the appraisal value of the home comes in lower than the purchase price, the purchase price needs to be renegotiated, or the transaction may be canceled. The lender won’t lend for more than the market value of the home as determined by the appraisal. They don’t want to be out more than the home is actually worth. It’s a good idea to get an appraisal for your sake as well to keep you from borrowing more than the actual value of the home.

Federal regulations say that the appraiser can’t have any financial interest in the property and must remain impartial. Appraisers also receive a lot of training in what to look for in a home and how to assess how much the market price should be.

Getting Your Home Appraisal

There are many things that an appraiser will look at when they assess a home. They will see how many bedrooms and bathrooms the home has, how functional the floor plan is, and figure out the square footage of the home. They will always enter the home in person to give the property a visual inspection of both the inside and the outside of the home. They will look for any conditions that have an effect on the value of the property. Problems like needed repairs can subtract from that value.

The Appraisal Report

When appraisers do their assessment, they usually use a form from Fannie Mae that is called the Uniform Residential Appraisal Report. This report has the appraiser use the form to describe both the inside and outside of the home as well as the area it is in. It also requires finding sales for comparable homes in the area and recording their prices.

The appraiser then analyzes the results from the form and makes a conclusion about the fair market value of the home based on what they observed. There are several things that are required to be in an appraisal report to show exactly how the results were concluded about the property.

Some of the factors required to be in the report include a street map that indicates the position of the property as well as where the comparable sales were located. It must also have a sketch of the exterior of the home. It is required that the appraisal records how they calculated the home’s square footage. There also have to be a number of photos that include the front and back of the home as well as the street it’s on. Photos of the exteriors of comparable properties must also be included.

The report should also have a lot of other data such as the public tax records of the property, market sales data, and more. Having all of these parts of the report together show a complete picture of how the appraisal price was determined from the records and the inspection.

How Long Does It Take?

The exact number of days it takes will depend on a lot of factors, including the workload of the appraiser and how complex the property and the report are. In general, the average time is about a week to 10 days. This includes the time needed to assess the property, do all of the research, complete the appraisal report, and then deliver that report. During the appraisal visit, it usually takes one to two hours to inspect the property, evaluate it, and measure its size.

When you’re in the market for a home and need to get a home appraisal for a mortgage, call us at AmeriMac Appraisal to get an appraisal scheduled for your property.