During the home-buying process, obtaining a home appraisal is a critical step. Let’s take a look at some of the frequently asked questions.
Q. What is an appraisal? How is it used?
A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate. The appraisal can include recent sales information for similar properties, the current condition of the property, and the location of the property, i.e., insight as to how the neighborhood impacts the property’s value.
Q. Who appraises the home and how do I know they will do a good job?
Appraisals are conducted by highly-trained professionals who are licensed and/or certified to determine the value of a home fairly, objectively and without bias in the state where the property is located.
While no appraiser is infallible, his or her opinion of the value of your home is informed by rigorous training, numerous tests, several years of on-the-job experience and required continuing education. They are also required to substantiate every finding in their reports that could influence a home’s value. Appraisers and their employers (often appraisal management companies) are heavily regulated. Consequences of issuing deliberately misleading or biased reports can be severe, so appraisers work hard to remain impartial and keep personal value judgments and prejudices out of their work.