Last Updated on July 10, 2023 by SampleBoard
For most people, the process of buying or selling a residential property can be long and overwhelming. There are many steps to take and things to consider, all of which are crucial for ensuring a smooth home purchase or sale. One thing both buyers and sellers need to think about in either case is the home appraisal.
In general, a home appraisal is defined as the impartial, professional opinion on the value of a home. It is an important step people need to complete when their home is still under mortgage, if they plan to take out a loan to do a few home improvements, or if they are planning to sell their property. This will give them valuable insight into how much their property is worth before they start making any financial moves on it.
However, the home appraisal process can be a bit complicated, especially if you’ve never gone through it before. From explaining how it works to learn how to increase the value of a home appraisal, here is the ultimate guide elaborating on everything you need to know about appraisals.
Typically, the home appraisal process happens after an offer is made on a property. A licensed and unbiased professional appraiser performs an assessment of the property to determine its fair market value based on several factors. These include:
Once the assessment is completed, the appraiser will prepare a report in which they will feature all valuable information about the property, along with photos, recent sales data, tax records, and any other details that are necessary for determining the value of the home.
The cost of a home appraisal can be several hundred dollars, depending on the property size, the condition of the home, its location, and the level of detail included in the report. The general rule is the bigger the property is, the more expensive the appraisal will be. In larger, metropolitan cities where the living costs are higher, the cost of the appraisal may also be higher.
Usually, potential homebuyers are responsible for covering the appraisal fees. These fees are typically due at the time of closing, though buyers can pay them upfront if they want to. In rare cases, a buyer might ask the seller to pay for the appraisal during negotiations, but only when the seller wants to sweeten the deal before closing.
Depending on your circumstances, there are several common types of home appraisals your lender may request of you, including drive-by, hybrid, desktop, and full appraisal. For example, a drive-by appraisal involves only assessing the exterior of a property to determine its worth. In this case, the appraiser will most likely rely on public records to estimate the home’s value.
Hybrid appraisals combine a virtual and in-person visit in which the appraiser uses photos to view the property and gathers additional information on the home by hiring a local professional.
Desktop appraisals are completed from the appraiser’s computer while using public records, photos, and real estate comps to get the information they need.
Full home appraisals are the traditional, in-person assessments where the appraiser determines the value of the home on the spot by taking photos and measurements.
Before arranging a meeting with an appraisal, there are some things you can do to receive the maximum value on your house. For example, one of the best ways to attract potential buyers is to spruce up your home’s curb appeal. You can do this by painting the exterior walls of the house, cleaning the lawn, upgrading the garage door, and clearing out dead plants.
A home improvement project which can also boost your home’s value and yield the best resale recovery rate of up to 75% is updating the kitchen. These can be minor upgrades such as repainting the kitchen cabinets and installing new hardware to adding a new countertop and smart kitchen appliances.
Whether you are thinking about selling your home, taking out a loan, or refinancing your existing mortgage, a home appraisal is an important step in the process. It involves hiring a certified appraiser to view the property and determine its value based on several factors.
If you want to know how the process works and how much it costs, refer to our post and learn everything you need to know about home appraisals.