Within the mortgage and homebuying world, one vital piece of the process to understand is the appraisal. Designed to produce a fair and unbiased value for a home about to be purchased, appraisals are based on several factors and play a big role in some of the major financial details of any home sale.
At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to walk you through the ins and outs of the appraisal process whether you’re a first-time homebuyer or an experienced real estate flipper. Let’s go over the simple details you need to know about an appraisal, including what it’s used for and the areas of a home that will be included in it.
Appraisal Basics and Uses
Appraisals refer to an event where a third party is hired to assess all the important factors that play a role in the value of a home. These third parties are known as appraisers, and they have received specific training in evaluating home values across many different property types.
In the majority of cases, the seller of the home in question is the one who arranges for an appraiser. This objective review of a home’s value is very valuable for sellers to present as they price their home. In other situations, though, appraisals can be requested by potential buyers or even by a lender themselves – this is often done so the lender can get their own in-house estimate for the value of a home they’re about to lend money to a buyer for.
Areas Appraisers Inspect
- Property details and location: Appraisers will assess all the property basics for your home, including the size of the lot and the structure itself. Lot size is important because it often means flexibility even if the structure doesn’t fill the entire lot. In addition, appraisers will consider the popularity of a given area, including how recent comparable homes nearby have done on the market.
- Home exterior: Appraisers will also look into several exterior areas, those connected with what real estate pros would call “curb appeal.” Areas here include walls and roofing quality, garages and driveways, siding and much more.
- Home interior: The appraiser will run through a wide list of various interior features, from plumbing and HVAC areas to a variety of appliances that might be needed in the home. They’ll check tub and bathroom areas for any potential future issues, and cover the entire interior of the home from top to bottom.
- Other improvements: Appraisers also want to see any evidence that the home has been improved from its original state. This may include a swimming pool, new floors, a security system, or a variety of other upgrades. These can change home value significantly.
For more on what happens during an appraisal, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.