What is the purpose of an appraisal in the mortgage process?

You know you want to buy a house and are ready to talk to us about a possible mortgage, but you aren’t quite sure how an appraisal fits into the process. Does that describe your situation?

An appraisal is an important estimate of the fair market value of the house you are looking to purchase. It is our way to objectively learn whether the house you want to buy is worth the amount you’re willing to pay — and the amount you want to borrow from us. An appraisal assures us that the sales price is in line with what the house is worth.

An appraisal looks at various aspects of the house, such as a square footage, age, and number of rooms. Additionally, sales of similar properties and the condition and location of the house are all part of the appraisal process. This means the neighborhood itself can affect the value of a house.

An appraisal doesn’t look at how the house is decorated or how clean it is. Instead, it looks at the physical aspects of the home, including walls, carpets, cracks, and even odors. All these findings must be properly documented by the appraiser.

This appraisal isn’t performed by just anyone, and appraisers don’t work for lenders. They are trained through education and testing, as well as experience. Any leader will require an appraisal, and the lender is the one who requests an appraiser to get to work. The cost is usually around $400 and the buyer typically pays it at closing.

We hope this clarifies any questions you have about the required appraisal. We look forward to talking with you further about the mortgage you look to obtain to purchase your next home!