N.E.O. Home Loans - Getting an Appraisal for Your New Home

Getting an Appraisal for Your New Home

There are always questions asked regarding the appraisal process and what to expect. The appraisal works as a safeguard for both you and the lender. The appraisal assures that you don't spend more on your new home then what it's worth and it also safeguards the lender from lending out more money than the home is currently worth.

Now that you have searched through all the homes available and decided on the one you want to buy, you're ready to move forward with your purchase. The next step for the lender is to order the appraisal and get an opinion on how much the home is currently worth. Below are the top things to understand about an appraisal. The information below should answer most of your questions regarding the appraisal process but if you have a question that isn't answered you can always contact me by phone at (440) 339-3099 or fill out online contact form and I can answer your question.

How long will the appraisal inspection take? - The appraisal process typically takes 3 to 5 business days. It could take longer if the appraiser has problems accessing the property.

Measuring The Home - An appraiser has different ways of obtaining measurements for the home. One was is to physically measure the property. They can also obtain the measurements from a prior mortgage survey or a previous appraisal. They can also get them from the county or city assessor's records. The square footage of the home will generally be determined from exterior measurements.

Finished basements and gross living area - Basements that are below grade or partially below grade are typically not considered part of the square footage or for rooms regardless if it has a walkout or not. Even though the basement might not be counted as living space the appraiser can make adjustments in favor for the value if it has been finished.

Bedroom Counts - The market doesn't recognize much of a difference between a 3 bedroom and a 4 bedroom home. The greater difference will come when you are comparing a 1 or 2 bedroom home to a 3 bedroom home.

Comparable Sales Data - When the appraiser looks for comparable sales, they are typically looking for recently closed sales similar in location, style, size, and features. These sales must be closed and verified by a public data source at the time of the appraisal. Comparable home sales should have taken place within the last 90 days, but may not always be possible in slower markets. In addition to the time period the comparable properties should be located within 1 mile of the home being appraised. Evaluations must be based on the closest comparable homes. The distance and time guidelines are usually exceeded when it comes to properties located in rural areas.

Appreciating and Depreciating Values - In our current market, a lot of homes are experiencing a decrease in value. This can lead to lower reported values. For example a house that was appraised for $150,000 6 months ago may only appraise for $125,000 today. The value depends on how much the comparable homes around the one you are buying have been selling for.

Understanding how the appraisal process works is a very important part to being prepared for your purchase. If you have any additional questions you can always call me at (440) 339-3099 or fill out my online contact form and I will be happy to answer any and all your questions. After all, that's why I'm here.