Appraisals are typically required when purchasing a home or refinancing an existing mortgage. It is used to determine if the property meets lending standards as well as how much money can be borrowed for a home.
The appraisal cannot be ordered directly by the buyer or seller; it must come from the appraisal department. Once the contract and initial documents have been submitted, your loan officer will place a request for the appraisal department to place an order with an appraiser.
The appraiser is then assigned and given generally 1-2 weeks to complete a home inspection on the subject property, observe the exterior of comparable homes, and deliver the written appraisal report.
The appraiser will contact the realtor, listing agent, or other access contact to enter the subject property and complete a visual inspection, including taking photos and measuring the interior of the property. Appraisers measure the gross living area, which may vary slightly from the assessor or public records because they measure themselves. They also collect a history of the home including past sales data, improvements and upgrades to the property, and neighborhood market trends to be considered in their valuation. The largest part of the appraisal report is the sales comparison analysis in which the appraiser uses recent sales of similar homes nearby to determine the market value of the subject property. This final determination allows us to evaluate risk and make a lending decision.
If you have any questions regarding the appraisal process, don’t hesitate to contact your loan officer for more information.