When you buy a house, your lender will need an appraisal of the home, and your loan depends on this assessment. After the seller accepts your offer, you will need to get this step completed before going any further. How do property appraisals work? What do appraisers do to determine the values of homes? Here is an explanation of the process used during a property appraisal.
The Appraiser Researches the Home
When someone hires an appraiser, they will begin the job by researching the home. They might look up tax records and deed information. They will look up sales history, location, and property tax information. They do these things to learn more about the home before they visit it. These facts can affect the value of the property, and they can also learn details about the house before going there.
The Appraiser Visits the House
After the appraiser has enough information about the home, they will schedule a visit to the house. During this visit, they will do many things. First, they will measure the home to ensure that it is the size the records show. Next, the appraiser will evaluate the condition of the home. They will look for upgrades around the house and features that add or remove value. The size, condition, and features the home offers will affect the appraised value. When the appraiser has enough information from the home, they will leave and finish the appraisal by completing one more step.
The Appraiser Compares the Home to Other Properties
The final step in the appraisal is the comparison step. During this step, the appraiser finds homes that were recently sold in the area that have similarities to the house in question. They compare these homes to the home they are assessing, and this helps the appraiser know what value to put on the house. Appraisers often use a method called price per square foot to compare homes. They then add or subtract values to the house based on the differences from one home to another. The homes that the appraiser uses to compare to yours are called comps.
Based on these things, your appraiser will calculate the current value of the house you want to buy. You should not experience any problems with your loan if the house assesses for an amount equal to or above the offer amount you settled on with the seller. If you have questions, talk to your agent or appraiser today.