Before a loan is granted to purchase a particular property, the property’s estimated market value must be professionally evaluated. This evaluation is undertaken by a licensed appraiser, assigned by the lender.
Even if a buyer has already had the home appraised for his/her own information, the lender will only use the information obtained on the property by the lender’s own trusted appraiser.
However, a seller may often benefit as well by having the property appraised in order to set a realistic selling price that reflects the homes overall worth. A seller’s agent can then use this appraisal and knowledge of current market conditions to help the property owner arrive at a selling price that should attract buyers, and still maintain an agreeable profit margin for the seller.
Appraisals generally cost between $300/$500 dollars, and should be performed by a licensed, registered appraisal agent.
A home appraisal is submitted by the appraiser in the form of a detailed home inspection report that will, among other things, include the following:
- Overall construction quality, including roof, windows, gutters, downspouts, inspection of exterior doors, etc.
- Heating/air conditioning systems, type and condition of floor coverings, condition of wall treatments, such as paneling, wallpaper and paint.
- Plumbing and electrical systems. Hot water heater.
Prior to setting an appointment with the appraiser, the seller and his agent should inspect the property in order to find and correct any defects found that could negatively affect the ultimate appraisal value.
Although the lenders property appraisal report will be the only one that counts, as far as the buyer is concerned, the seller, by having his own appraisal, will be in a much better position to evaluate the buyer’s offer.