What is an Appraisal?

Appraisals are most often what a lender uses to determine the value of a home you are asking them to lend you money on.

An appraisal differs from a market analysis performed by a real estate agent. While most market analysis reports generally are close to the final appraised value, a lender requires a third party to complete a detailed appraisal before approving your loan.

The appraiser should have no interest in the property. The appraiser’s opinion of value is determined by comparing the subject home to recently sold homes in the neighborhood, calculating the cost per square foot for construction and accounting for improvements and upgrades to the subject property.

The appraisal is a lender required item that most purchasers will pay for when they first meet with their loan originator after a contract on a home is in place. The cost of the appraisal will vary slightly depending on the borrower’s choice of financial institution. Your loan originator should provide you at your initial meeting with a good faith estimate outlining the costs associated with purchasing a home.

Please do not confuse an appraisal with a home inspection. While an appraiser may note a condition needing repair, their job is not to inspect the home’s warranted items. You should always get a home inspection to determine condition.

Call or e-mail me at 407-343-5761 to be placed in contact with a professional mortgage consultant who will further explain the appraisal and home loan process. This consultation is free and without further obligation to you.