What is a Home Appraisal?
A home appraisal is a normal part of the home buying process. Whenever a bank or lender is issuing a mortgage, second mortgage, or refinancing of any kind, they ask for an appraisal of the property. Typically an independent appraiser will inspect a piece of property, looking for certain values and features, and then will report the appraisal number back to the lender.
Lenders want to be sure that the amount of the mortgage being approved is correct. A house or piece of property must be appraised before a mortgage can be approved for a home.
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Does an Appraiser Look at Everything in a House?
There are two misconceptions about home appraisals: that appraisers inspect every corner of the home, and that they will give a lower appraisal for things like dirty dishes in the sink. Both of those are incorrect!
Home appraisers are not inspecting a home for specific signs of damage or areas of concern. If a foundation crack is visible or a roof is clearly caving in, they will take those things into consideration. However, home appraisers are not there to make sure your electricity, plumbing, and other important utilities are working, and they’re not responsible for any major repairs that they did not see.
What is Looked for in a Home Appraisal?
Home appraisers are also not there to lower the value of a home because of temporary conditions like clutter, dirty dishes, or any other non-permanent situation. They are only appraising a piece of property for market value. They’re considering factors like:
- Value of surrounding homes
- Current condition of home, not including temporary circumstances
- Permanent amenities, like fireplaces
The home appraisal process won’t consider personal property part of the property to be appraised. For example: if a hot tub could be removed without exposing plumbing or creating a “hole” in a deck, it will typically not be included in an appraisal. Home appraisers have special guidelines to consider when forming an appraisal.
Home Appraisal Process
Your lender is not allowed to directly choose an appraiser, but they will go through an agency or company who will then choose an appraiser. This protection was put in place after the housing market crash of 2009, when it was discovered that certain lenders were affecting appraisal values and approving higher loans. When you apply for a mortgage, your lender can walk you through the appraisal process.
How to Prepare for a Home Appraisal
If you’re concerned about the value of a home you are selling or buying, you might consider hiring an appraiser before the official process begins! Though it will cost you more, an independent appraiser can help guide you toward getting the most from your home. If you have any questions about home appraisals in the Las Vegas area, contact Galindo Group today!