home appraisal is a crucial step in the home purchase or refinance process. Let me break it down for you:

  1. Purpose: When sellers and buyers agree on a price for a home, the appraiser steps in as an impartial third party. Their job is to evaluate the home’s value. Lenders rely on professional appraisals to ensure that the home’s value aligns with the agreed-upon price.

  2. What Is a Home Appraisal?: A home appraisal involves a certified or licensed appraiser assessing the property’s value. The lender hires the appraiser during the home purchase or refinance process. The goal is to prevent the lender from providing too much money to the buyer. The appraisal is also essential for the buyer and seller because a lower appraisal value could reopen price negotiations1.

  3. Process:

    • Property Visit: The appraiser inspects both the exterior and interior of the home. They check for structural integrity, safety issues, room count, and any significant upgrades since the last real estate transaction. Photos are taken during the walk-through.
    • Special Requirements: For government-backed loans (such as FHA or VA loans), additional checks are necessary. For example, an FHA-backed loan appraisal includes testing utilities and appliances to ensure they’re in working order.
    • Cost: The buyer typically pays for the appraisal, which usually costs several hundred dollars1.

Remember, the appraisal helps everyone involved make informed decisions during the home buying process!