Property appraisals are an important aspect of real estate, particularly when you are trying to sell your home. You may have a lot of knowledge about the appraisal process, or you may be brand new to appraisals. Check out Richr’s top ten facts about home appraisals every seller should know. The following information will give you a more in-depth understanding of what home appraisals are for and why they should matter to you—whether you are a homeowner, a seller, or a buyer.
Property Appraisals—Common Questions
1. What is a property appraisal?
A property appraisal is used to determine the market value of a property. An appraiser examines a property to find out what features the property has and then compares the property to other similar properties that have sold recently. The goal is to get a relatively accurate assessment of what the property would sell for in the current market.
2. Are a property appraisal and a home inspection the same thing?
It is common to get the two confused, but property appraisals and home inspections are quite different. A property appraisal is conducted to determine the market value of the home. A home inspection is conducted to determine the condition of the home—like if there are things wrong with the home that a buyer should know about. It is possible for an appraisal to identify problems with a home, but that is not the primary purpose of the appraisal. Most real estate sales involve an appraisal and an inspection.
3. What does a property appraiser do?
A property appraiser goes to a property and conducts a thorough inspection of the various features of the home. They will verify the square footage, how many bedrooms and bathrooms the home has, what kind of condition the home is in, and more. It takes multiple hours in many cases to check over everything in the home, since doing so requires going through every room, storage area, etc.
After the appraiser has inspected the home and recorded all the information they need, then comes the second half of the appraisal process. They must examine the sales that have recently happened in your area of homes like yours. Ideally, they can find multiple homes that are quite like yours. Using the information about your home and the information about other sales in the area, the appraiser will decide upon a market value for your home.
4. What qualifications should property appraisers have?
Property appraisers must go through a rigorous qualification process to gain the skills and experience necessary to conduct appraisals. Not only do they have to complete coursework on real estate and appraisals, but they also must get real-world real estate experience to qualify for their license. Once they have completed all the necessary coursework and met the minimum hourly requirements for work experience, they take an exam to earn their license.
5. How much does a full-service real estate appraisal cost?
The cost of appraisals varies by region, but in 2019 the average cost of appraisals was approximately $300 to $400.
6. Who pays for the appraisal?
In most cases, it is the buyer who pays for the appraisal. Lenders require appraisals before they will give money to borrowers. Since buyers need the appraisal to get a mortgage, they tend to pay for the appraisal. However, there are situations where the seller may pay for the appraisal—like if the seller really wants to sell the home to the buyer and decides during negotiations that it is worth footing the bill for the appraisal.
7. What is the benefit of online home value estimator tools from Zillow, Ownerly and Housecanary when they can’t see inside your home?
Home value estimators are useful for getting an idea of what your home is worth or what other homes are worth. You can find free tools online at Zillow and Ownerly. However, when you are getting serious about selling your home, it is important to know that they are not a substitute for getting an appraisal by a professional in your area. Miami Dade, Broward and Palm Beach have full-service appraisers that are familiar with the local market in real-time, so they are the ones best equipped to give you a clear idea of the value of your home. Lenders will require an accurate appraisal conducted by a local professional before they approve a mortgage for a buyer as well.
8. Are there any benefits to getting an appraisal if you are not planning on selling your home?
While most appraisals are conducted as part of a home sale, there are other situations where an appraisal can be useful—or even necessary. An appraisal is a relatively affordable way to get a clear picture of what your home is worth. Knowing your home’s value is a nice feeling on its own, but also brings benefits for financial planning.
Probably the most common reason homeowners get appraisals when they are not selling, though, is because they want to contest property taxes. If your property taxes go up more than you believe they should, it is possible that your home was overvalued. A current appraisal will give you documentation showing what the market value of your home actually is.
9. How long is an appraisal good for?
Since the market is always changing, the value of your home can change regularly as well. For most circumstances, an appraisal will be considered accurate for a period of one year. However, if you are in a market where the prices of homes are changing more rapidly, a lender might require you to get a new home appraisal after six months instead of a year.
10. What if you don’t agree with the appraisal?
It is possible for an appraiser to make a mistake. If you think the home was appraised incorrectly, you can discuss it with the appraiser. Just make sure you have valid reasons. Many times, when homeowners request a second appraisal, they wind up with a similar value as the first appraisal.