What is a Home Appraisal?
A real estate appraisal is an independent valuation of a home to determine its market value.
In general, a home appraisal is organized by a lender and is usually paid for by a buyer. All loans require an independent appraisal.
The reason the lender requires an appraisal is to protect you and to protect themselves. Basically, lenders want to protect themselves by ensuring the property you are considering buying with a loan from their institution is worth its market value.
The Importance of an Appraisal
Getting a home appraised is extremely important. Though the most common use is for a mortgage loan, it is also commonly used for many other reasons. It can also help you lower your taxes, eliminate private mortgage insurance, estate planning, analyzing the feasibility of proposed improvements, and for insurance purposes.
The Appraisal Process
An appraiser's will inspect the property being appraised to collect data about the home. The appraiser will analyze market data, including both historic and current comparable sales, current offers, pending sales and proposed improvements to arrive at an appraised opinion of value for your home. The appraiser will also compare your property to the broader market. Depending on the purpose of the appraisal, the appraiser might choose to weigh different factors more heavily than others.
In generating his appraisal, an appraiser will gather information from a wide variety of sources, including a local Multiple Listing Service, local real estate professionals, county courthouse records, private data vendors, owner interviews, and his or her own personal knowledge. The quality and reliability of each piece of information will be weighed by the individual appraiser.
Is an Appraisal a Home Inspection
An appraisal is different than a professional home inspection. An appraiser formulates an opinion of a property's value for a lender, while an inspector educates the buyer about the condition of the home and its components.
The REAL Value of an Appraisal
An appraisal performed by a qualified, professionally licensed appraiser is a valuable tool that will give you peace of mind in knowing that your home continues to be the investment you want.