Home Appraisals? The Impact on Buyers and Sellers in Real Estate Transactions

An appraisal is an assessment of the fair market value of a property. Here are some basic key points about appraisals:

Home Appraisal:

A home appraisal is specifically an estimate of a residential property’s value by a licensed appraiser.

Whether you’re buying, selling, or refinancing a home, an appraisal is typically an important part of the process because the results can affect the buyers ability to receive a loan.

Most lenders require a home appraisal to ensure that the borrower isn’t taking a loan out for more money than the property is worth.

The appraisal also helps you determine if you’re making a good investment.

During a home appraisal, a licensed appraiser performs a visual inspection of the home’s interior and exterior, researches recently sold comparable homes nearby, and analyzes public record data. 

The appraiser then compiles a report on the homes appraised value, which is shared with the buyer and the lender.  

Home Appraisal vs. Home Inspection:

While a home appraisal and home inspection are both important pre-closing steps, they serve different purposes:

Appraisal: Evaluates the home’s condition to determine its fair market value.

Inspection: In-depth test of the home’s major systems (structure, electrical components, plumbing) to ensure they function properly.

Here’s a step-by-step view of the home appraisal process:

1. The lender orders an appraisal.

2. The appraiser performs a property walkthrough and research.

3. The appraiser shares a detailed report of the property’s valuation based on their findings.

4. A copy of the report is shared with the buyer and the lender for review.

* The buyer is responsible for paying the appraisal fee

Remember that an appraisal provides an estimate of value, while a home inspection focuses on the condition of the property itself. If you’re ever in doubt, consult with professionals to guide you through the process!

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