The home appraisal process is a critical part of buying or refinancing a home, as it helps determine the property’s market value. Here’s an overview of how it typically works:
1. Requesting the Appraisal
- For Buyers: The appraisal is usually ordered by the lender once your offer on a home is accepted.
- For Refinancers: The appraisal is ordered by the current lender as part of the refinancing application process.
2. Choosing an Appraiser
- Lender’s Role: The lender often chooses a licensed appraiser from a network or appraisal management company (AMC).
- Appraiser’s Qualifications: The appraiser should be state-certified or licensed and have experience with properties similar to yours.
3. Scheduling the Appointment
- Timing: The appraisal appointment is scheduled by the appraiser, and it typically takes about 30 to 60 minutes.
- Preparation: Ensure the property is accessible, and any areas of the home that need to be inspected are clear.
4. Appraisal Inspection
- Interior and Exterior: The appraiser inspects both the interior and exterior of the home, looking at factors like the condition, size, layout, and any upgrades or renovations.
- Comparables: They also analyze comparable properties (comps) in the area that have recently sold to determine a fair market value.
5. Valuation Report
- Report Details: The appraiser compiles their findings into a detailed report, including the estimated value of the property, photographs, and a description of the property’s condition and features.
- Delivery: The report is sent to the lender, and in some cases, you might receive a copy as well.
6. Review and Next Steps
- Lender Review: The lender reviews the appraisal report to ensure the property’s value supports the loan amount.
- Potential Outcomes: If the appraisal comes in at or above the purchase price, the process continues as planned. If it’s lower, you might need to renegotiate the purchase price or come up with additional funds.
7. Possible Challenges
- Disputing the Appraisal: If you disagree with the appraisal, you can request a reconsideration or get a second appraisal. However, this process can be time-consuming and may not always result in a different outcome.
- Adjusting the Deal: Sometimes, the deal might fall through if the appraisal is significantly lower than the agreed-upon price and you cannot renegotiate.