A property appraisal is an estimate of a property’s value. Property value is based on such factors as location, amenities, structural condition and recent sales of similar local properties. ~ Realtor.com
Contrary to popular belief, the purpose of an appraisal isn’t for the buyer or seller. By the time an appraisal is ordered, the buyer and seller have typically already agreed on a price. The appraisal actually serves the bank. If you were handing someone hundreds of thousands of dollars, you’d want to make sure the collateral is valued for the proper amount to justify the loan.
During the mortgage crisis early this decade, it was found that lenders were putting undue pressure on the appraiser to come up with a value. Because the lender who originates your loan will likely sell your mortgage on the secondary market, it’s important to remove this bias from the appraisal process and lenders are no longer allowed to choose the appraiser. Appraisers are selected by either a forth-party appraisal management company or by a pre-approved cyclical list of providers.
Appraisals are performed by licensed appraisers. These are unbiased certified professionals that are knowledgeable in real estate and know how to make the correct evaluation by factoring in, among other things, market conditions and neighborhood trends . It usually takes about 15-30 minutes for the appraiser to walk through the home. During this time, they assess the home’s condition, measure the square footage and verify the listing details are accurate.
After the appraisal appointment, it can take anywhere from 5 to 10 business days for the appraiser to complete their report. After that, the bank may not release the findings until an underwriter reviews the report, further delaying the time it takes to learn the results. If the underwriter doesn’t agree with the appraiser’s findings, they can adjust the report or call for a new appraisal, although the latter is not common. Please keep in mind that during this process, patience is a virtue.
As a home buyer, when you receive the results of the appraisal, you want to make sure a printed hard copy finds its way into your files. These can be very useful for many reasons in the years to come.
The appraisal is one of the last steps before the bank finalizes the loan, therefore it is important that the house presents well for the appraiser. We recommend the home be presented during this process the same as you would for a tentative buyer . For example, you may want to leave the staging in place or hold off packing. Although some appraisers can give value regardless of presentation, a well-presented home seems to always fair better when it comes to perceived value. Like putting on your Sunday best, we want to go into the appraisal appointment with our best foot forward. Taking care of the little things, like cleaning kitty boxes, taking the garbage out, turning all lights on and tidying clutter will often times go an extra mile.
|We asked our favorite lenders which appraisers they recommend. Here’s what they said…|
|Our Favorite Lenders||Their Favorite Appraiser|
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