home appraisal faq

Home Appraisal FAQ

1. What is a property appraisal?

2. What does an appraiser do?

3. Do lenders choose the property appraiser?

4. How much does a mortgage appraisal cost?

5. Who pays for the property appraisal?

6. I’m refinancing. Do I need another appraisal?

7. How long does it take to complete a mortgage appraisal?

8. Can an appraisal serve as a home inspection?

9. What is an independent appraisal?

Copyright 2013, LessThan6Percent

Table of Contents

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*Source: National Association of Realtors. Home Buyer/Seller Profile 2012

FAQ 1

What is a property appraisal?

A property appraisal is an unbiased estimate of the true value of a

property at a single point in time. It is conducted by a licensed, certified

professional. When buying a home, an appraisal can confirm whether the

property is worth the amount you are paying.


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FAQ 2

What does an appraiser do?

An appraiser provides an estimate of the value of a property by looking at

the location, amenities and recent sales (or comps) of similar properties

in the same neighborhood.

The inspection often includes a walk-through to determine the general

condition of the property and note any amenities of value in that area.

Often, the appraiser will photograph or sketch the property’s layout. If

there are any health or safety code violations, the appraiser will list them

so they can be corrected before the lender approves a loan.


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FAQ 3

Do lenders choose the property appraiser?

Usually, the lender will choose the property appraiser, but you are entitled

to see the results. Keep in mind that lenders and broker’s agents are not

allowed to “up charge” for third party services. Most lenders require a

professional appraisal to determine the current market value of a property

before they approve a mortgage loan.


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FAQ 4

How much does a mortgage appraisal cost?

Appraisals range from $350 to $600 depending on the size and value of

the property. Prices vary depending on region, type of appraisal report

requested and the amount of effort required to complete the report.

Drive-by appraisals and updates to existing reports are usually under

$275, however lenders are not likely to approve a loan based solely on a

drive-by appraisal.


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FAQ 5

Who pays for the property appraisal?

The buyer typically pays the fee as part of the total closing costs. If you are a

motivated seller, you could order and pay for a professional appraisal to support the

price you are asking and reduce the buyer’s closing costs.


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FAQ 6

I’m refinancing. Do I need another appraisal?

Yes, but if you are refinancing and the property has been appraised

within the past three years, some lenders will be ok with a “drive-by”

appraisal as opposed to a full appraisal, saving you money.


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FAQ 7

How long does it take to complete a mortgage appraisal?

3-7 business days.


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FAQ 8

Can an appraisal serve as a home inspection?

No, an appraisal is not a home inspection. Inspections involve a licensed

home inspector or contractor who evaluates the structure and

mechanical systems (heating, plumbing, air-conditioning, etc.) of a

house, from foundation to rooftop.

The appraiser is typically more interested in sales prices (within the past

six months) of comparable homes in the neighborhood, the exterior

presentation of the property and amenities that enhance the value in that

market.


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FAQ 9

What is an independent appraisal?

An estimate of the value of a property that is prepared by an appraiser

who has no interest in the property and nothing to gain from a high or

low appraisal.


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home appraisal faq

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