When purchasing or refinancing your mortgage, your lender is likely to require an appraisal. This helps them avoid losing money and guarantees they don’t lend more than what can be recovered in case of foreclosure.
An appraisal is a comprehensive report that estimates a property’s market value. It involves physical inspections of the home and analysis of comparable sales data to arrive at this figure.
Location
Appraisals are an integral component of a real estate transaction, impacting both the sale price and loan amount. Mortgage lenders require knowledge of a home’s worth before they will agree to lend money.
If you are wondering how long does an appraisal take, location is one of the biggest influences on a property’s appraisal value. If it’s located in an undesirable neighborhood, that will negatively affect its value.
Home prices in more desirable neighborhoods often receive higher appraisals than their counterparts elsewhere, due to factors like schools, lots and overall condition.
An appraiser uses market data, public records and interviews with buyers, sellers and real estate brokers to estimate the fair market value of a property. They then develop an opinion of value and compile supporting data into an appraisal report which is then used by lenders, taxing authorities and insurance companies when making decisions regarding it. It may even prove helpful in settling disputes among heirs to an estate.
Home Improvements
An appraisal is an integral component of the home-buying process and lenders use it to set loan parameters. During an appraisal, an appraiser assesses your property’s condition in comparison to similar properties and recent improvements.
Appraisals can take anywhere from one to fourteen days, depending on market conditions and your lender’s requirements. In case of a pandemic or other emergency, however, you may have to wait longer than that in order to receive your appraisal results.
If you’re contemplating a home renovation, make sure your plans are written down so the appraiser can view them clearly. By having an accurate idea of the changes and how they will impact the value of the property, Craig says this can help avoid inaccurate assessments.
Before the appraiser arrives, make sure your house looks its best. Mow the lawn, rake up leaves, pull weeds and trim trees for a pristine and inviting exterior.
Property Condition
An appraiser will inspect all aspects of a property’s condition. They’ll inspect the roof, HVAC system, plumbing and electrical components.
They will also take into account the neighborhood. A home located in a historic district or one that’s surrounded by well-maintained other homes will likely be worth more than one that isn’t, such as one not in an emerging development.
Additionally, the appraiser will inspect any major home improvements you’ve made since moving in. Things like applying a fresh coat of paint, changing out your bathroom vanity or switching to more energy-efficient appliances can add significant value to your property.
Property condition assessments (PCAs) involve conducting a walk-through survey, document review and interview process. The outcomes of these assessments are documented in a Property Condition Report (PCR).
Appraisal Report
Appraisals are an integral part of the home buying process, helping buyers and mortgage lenders determine a property’s fair market value. Furthermore, appraisals ensure that loan amounts won’t be too high for potential purchasers to afford.
A licensed appraiser creates the appraisal report, using data from recent sales in the area to estimate a property’s worth. This process may take several days or weeks depending on the appraiser’s workload and how complex the report must be.
In addition to assessing the property’s condition, an appraiser will also conduct research on comparable homes nearby. They seek out houses that have similar square footage, floor plan, number of rooms and upgrades as the subject property.
