Home Appraisal FAQ

1. What is a property appraisal?
2. What does an appraiser do?
3. Do lenders choose the property appraiser?
4. How much does a mortgage appraisal cost?
5. Who pays for the property appraisal?
6. I’m refinancing. Do I need another appraisal?
7. How long does it take to complete a mortgage appraisal?
8. Can an appraisal serve as a home inspection?
9. What is an independent appraisal?
Copyright 2013, LessThan6Percent
Table of Contents
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*Source: National Association of Realtors. Home Buyer/Seller Profile 2012
FAQ 1
What is a property appraisal?
A property appraisal is an unbiased estimate of the true value of a
property at a single point in time. It is conducted by a licensed, certified
professional. When buying a home, an appraisal can confirm whether the
property is worth the amount you are paying.
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FAQ 2
What does an appraiser do?
An appraiser provides an estimate of the value of a property by looking at
the location, amenities and recent sales (or comps) of similar properties
in the same neighborhood.
The inspection often includes a walk-through to determine the general
condition of the property and note any amenities of value in that area.
Often, the appraiser will photograph or sketch the property’s layout. If
there are any health or safety code violations, the appraiser will list them
so they can be corrected before the lender approves a loan.
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FAQ 3
Do lenders choose the property appraiser?
Usually, the lender will choose the property appraiser, but you are entitled
to see the results. Keep in mind that lenders and broker’s agents are not
allowed to “up charge” for third party services. Most lenders require a
professional appraisal to determine the current market value of a property
before they approve a mortgage loan.
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FAQ 4
How much does a mortgage appraisal cost?
Appraisals range from $350 to $600 depending on the size and value of
the property. Prices vary depending on region, type of appraisal report
requested and the amount of effort required to complete the report.
Drive-by appraisals and updates to existing reports are usually under
$275, however lenders are not likely to approve a loan based solely on a
drive-by appraisal.
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FAQ 5
Who pays for the property appraisal?
The buyer typically pays the fee as part of the total closing costs. If you
are a motivated seller, you could order and pay for a professional
appraisal to support the price you are asking and reduce the buyer’s
closing costs.
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FAQ 6
I’m refinancing. Do I need another appraisal?
Yes, but if you are refinancing and the property has been appraised within
the past three years, some lenders will be ok with a “drive-by” appraisal
as opposed to a full appraisal, saving you money.
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FAQ 7
How long does it take to complete a mortgage appraisal?
3-7 business days.
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FAQ 8
Can an appraisal serve as a home inspection?
No, an appraisal is not a home inspection. Inspections involve a licensed
home inspector or contractor who evaluates the structure and
mechanical systems (heating, plumbing, air-conditioning, etc.) of a
house, from foundation to rooftop.
The appraiser is typically more interested in sales prices (within the past
six months) of comparable homes in the neighborhood, the exterior
presentation of the property and amenities that enhance the value in that
market.
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FAQ 9
What is an independent appraisal?
An estimate of the value of a property that is prepared by an appraiser
who has no interest in the property and nothing to gain from a high or low
appraisal.
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