Home appraisals have a big impact on securing financing for a home. As a buyer, the process can feel opaque. To shed a light on home appraisals and help both buyers and sellers understand how long a home appraisal takes, I have put together some home appraisal basics to help answer common questions like:
- How long does a home appraisal take?
- What happens during a home appraisal?
- Who pays for a home appraisal?
Let’s get started!
Home Appraisal Basics
When a prospective home buyer puts an offer in on a property, she does so under the assumption that the home is “worth” the bid price. If the home buyer needs financing though, a lender will want to verify the value of the property before originating a mortgage. The lender engages a third-party appraiser to verify the value of the home. Once they have determined a value, they will decide whether they want to offer a mortgage on the property and for how much.
Sometimes home sellers opt to have an independent appraiser conduct an appraisal of their property so they can price their home accordingly. In this article, though, I am going to focus on the home appraisal that occurs during the purchasing process.
Who Conducts the Home Inspection?
A home buyer’s lender will work with a third-party appraiser to conduct the home inspection. The home buyer or seller does not choose the appraiser.
If a seller wants to conduct their own home appraisal before listing their home, they can choose their own appraiser.
How Long Does a Home Appraisal Take?
How long a home appraisal takes to complete depends on how busy the appraiser is, where the home is located, and how unique the property is.
In Tampa, and Florida in general, the real estate market remains hotter than in other parts of the country. This can impact home appraisal times since appraisers may be booked up and require a longer turnaround time to complete the appraisal.
If the property has unique features that make it stand out from homes that may otherwise be considered comparable, the appraisal process may take longer since the appraiser will need to research the value of those features.
What Happens During a Home Appraisal?
During the home appraisal, the appraiser will look at the condition of the home, the size of the home, and comparable properties to determine a fair market value.
Condition of the home: Appraisers look at the external appearance of a home to see if there are any structural flaws or roofing damage that may impact the value of the home. Appraisers also consider updates that have been done to the house.
Size of the home: The square footage of a home can have a large impact on its value. Appraisers look at the general square footage, as well as the types of rooms a home has and how large they are. This helps them identify comps.
Comparable properties: Also called comps, properties that are similar in size, features, and location which have sold within the past few months are used to help assess the value of a home.
Can I Be Present for a Home Appraisal?
It is not necessary to be there. The listing agent typically meets with and lets the appraiser in the house. While you can be present for a home inspection, the home appraisal is a different type of process. While a home inspector enters a home and checks every nook and cranny for issues, a home appraiser completes their job at the property and at their desk. A lot of research and calculation goes into the process, which is not something that can be monitored.
Why Do I Need a Home Appraisal?
If you want to secure financing for your new home, most lenders will require a home appraisal as part of the process. This is a risk assessment measure for the mortgage company. If you do not want to wait for a home appraisal, you can submit a cash offer that does not rely on a lender.
Who Pays for a Home Appraisal?
Generally, the home buyer pays for the appraisal as part of their closing costs, unless the home buyer has an agreement with the seller wherein the seller will cover part of their closing costs.
What If My Home Appraisal Is Low?
If the home appraisal for your desired property assesses the value of the home as less than the sale price, you have a couple of options. You could appeal the assessment or you can renegotiate the sale price if the appraisal is much lower than your accepted bid. Since the appraisal determines how much your lender is willing to offer for your mortgage, a low appraisal may mean that you will need to cover more costs out of pocket unless you can renegotiate. If you cannot renegotiate or appeal the appraisal successfully, you can also cancel the contract and receive your earnest money deposit back.
Learn more about what to do if you receive a low appraisal here.
What If My Home Appraisal Is High?
If the home appraises for more than the sale price, you are in luck. That means you got a great deal on your property. You do not need to do anything.
The Home Buying Process Made Easy
Real estate does not have to be cryptic. No one should need to know everything to buy a home. When you work with a trusted Realtor, you can rely on her expertise to guide you through the process and explain anything you do not understand. Let me help you find the next place you will be excited to call home. Contact me today!