While home appraisals can be stressful and sometimes cause a hitch in the home buying process, they are relatively simple.
Required by the Lender
Appraisals are generally required by the mortgage company if you are using the home as collateral for the loan. Lenders want to ensure that the property is worth at least as much as you're paying for it. The appraisal is a valuation of the property you want to purchase.
Impartial Valuation
An independent third-party is hired to do the appraisal to ensure that this person has no financial stake in the outcome of the appraisal mortgage. Lenders usually hire an appraisal management company which in turn, hires a local appraiser who is on their approved list.
Components of an Appraisal
Appraisals must include...
Current Real Estate Market
Age of the Home
Neighborhood
Home Location
Comparable Home Prices
Amenities
Updates & Renovations
How Long Does It Take?
We encourage our buyers to ask the lender to wait until we're through the settlement of the inspections before allowing the appraiser to go out to the property. The physical visit usually lasts less than an hour.
The real work is back at the office, where it then takes about seven days for the appraiser to complete the research and get the report written up. Lending guidelines typically give him or her a total of 10 business days, at the most.
Once the lender gets it, the underwriters begin the review process, along with all the other final details and documents needed for a final appraisal report.