What You Need to Know About Home Appraisals: The Essential Guide
Aug 18, 2022

If you’re buying or selling a home, you’ll likely need to have an appraisal done. Appraisals are essential for real estate transactions and help to ensure that both the buyer and seller are getting a fair deal. This guide will discuss what appraisals are, why they’re essential, and what you can expect from the process. We’ll also provide some tips on preparing for your appraisal appointment!

What Are Appraisals?

An evaluation is a process by which a real estate agent determines the value of a property by evaluating the characteristics of the house and comparing it with similar properties that have been sold recently. The appraiser will also consider the conditions of the local market when determining the value of the property. This information is used to create a report that is presented to both the buyer and the seller.

Lenders want to make sure that buyers do not want to acquire another property because the house serves as a guarantee for the mortgage. If the borrower must predetermine the mortgage and enter the mortgage, the lender will sell the home to recover the money he lent. The appraisal helps the bank protect against loans more than you might be able to recover in this worst scenario.

Why Are Appraisals Important?

According to the Appraisal Institute, an association of professional real estate appraisers, a qualified appraiser should be licensed or certified in all 50 states and be familiar with the local area. Per federal regulations, the appraiser must be impartial and have no direct or indirect interest in the transaction.

Appraisals are essential because they help to ensure that real estate transactions are fair and equitable. They also provide a benchmark against which the parties can measure the property’s value. In some cases, it may be required by the lender to approve a loan because the appraisal primarily protects the lender’s interests; the lender will usually order the appraisal. An appraisal costs several hundred dollars, and the borrower generally pays the fee.

What to Expect from the Appraisal Process

It is common for appraisers to use the Uniform Residential Assessment Report of Fannie Mae for single-family households. The report describes the interior and exterior of the property, neighborhood, and close and comparable sales. The appraiser provides an analysis and conclusions on the property’s value based on its observations.

The evaluation report includes:

  • A street map showing the property assessed with comparable reference sales.
  • A sketch of the exterior building.
  • An explanation of how they calculated the total area.
  • Photographs of the front, back, and scene of the street.
  • The used frontal exterior shots of each comparable property.

The report can also include information related to market sales data, public land records, and public tax registers, which the appraiser requires to determine the property’s market value.

When buying or selling a home, it’s essential to have as much information as possible. That’s why we put together this guide on home appraisals—so that you can arm yourself with the knowledge you need to get through this process smoothly. If you have any questions about home appraisals or anything else related to the purchase or sale, please don’t hesitate to reach out to one of our professional real estate agents. We’d be happy to help!

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