This post was contributed by a community member. The views expressed here are the author's own.

Neighbor News

House Appraisal Process by Mary Crane, Century 21 Commonwealth

Have you wondered how the real estate appraisal process works?

A guide to common questions on house appraisal

You're moving along with the various steps for buying a house. Perhaps you already have a qualified agent to help you through the process. You've determined which home suits you best. Knowing that a house is an investment, in order to determine its worth and subsequently receive a loan approval to move forward with the financial arrangements, it is necessary to conduct an appraisal of property. This article will take you through the process of property appraisal and answer some of the questions you may have, such as who pays for the appraisal and how much it costs, how it is done, and what the turn around time is.What is an appraisal and how is it done?A property appraisal is an estimate of a property's value. The factors upon which this property value is based include location, recent sales of local properties that are similar, and the property's particular amenities.Walking through the property, a licensed professional will determine its condition and list any amenities that may either add or take away value, such as a swimming pool. If your house is the only one on the block without a swimming pool, this will detract from the value of the house.The appraiser will sketch or take photos of the property layout for this assessment. He will record any safety code or health violations. Before receiving a loan approval, you will have to take care of those problematic situations.Who performs the appraisal and who does the hiring?A state-licensed or certified appraiser is qualified to do the job of property appraisal. The lender will usually hire this individual. While most states require such certification, others may not be as strict. Make sure the appraiser has a license. He may be a member of a professional organization such as The Appraisal Foundation that has strict rules on conduct and ethics. Otherwise, if the appraiser has outside interests, you may not end up with a correct property assessment.How much does an appraisal cost? Who pays?Depending on the property value, location, and size of your property, you can expect a range of $300 to $600 on average for an appraisal. Keep in mind that different appraisal report types exist and the effort to finish each one may vary—possibly affecting the price as well. The property appraisal is normally a set fee given in the loan agreement. The party that takes out the loan pays for it, unless the sales contract specifies otherwise. Then the buyer pays the fee in the closing costs.Broker's agents and lenders may not charge up front for this service. Sometimes an anxious seller can order and pay for the appraisal of property to support the asking price, which reduces the closing costs for the buyer. When the appraiser sets the fee for the lender, the lender may not adjust the fee.A "drive-by appraisal" that does not pay as much attention to detail as the walk-through may cost under $275. An update to an already existing report will run about the same cost. Check to make sure that your lender will accept a drive-by appraisal that includes all of the necessary research and paperwork that supports the property's value.How much time does an appraisal take?For most loans, a typical property assessment takes between one and two hours and a "drive-by" assessment will take significantly less time. Turn around time should be within three to seven business days. Hopefully, this step of the process will go smoothly so that you can get your loan approval quickly and start moving forward on moving in.
We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?

More from Dover-Sherborn