THE WHO, WHAT AND WHEN OF APPRAISALS
Appraisals are an integral part to buying, selling, or refinancing a home. Whether you’re buying a
home using a mortgage, refinancing your existing mortgage, or selling your home to anyone other than an all-cash buyer, it’s important to understand the who, what, and when of the appraisal process.
A home appraisal is a licensed or certified appraiser’s opinion of a home’s value. Unless otherwise negotiated, the buyer generally pays for the appraisal. Typically, the average single-family home appraisal costs between $300 and $400, but several factors such as the size and location of the home can cause the cost to increase.
In determining the fair market value of a home, a certified or licensed appraiser will complete a Form 1044 – The Uniform Residential Appraisal Report by undertaking the following steps:
• Research the history of the home going back at least 36 months to obtain sales data and sales history.
• Review MLS information on comparable homes that recently sold with similar square footage, number of bedrooms, and bathrooms. The appraiser will consider neighborhood characteristics, market trends, and the home’s proximity to amenities, employment opportunities, and transportation.
• Conduct an onsite inspection to take measurements and photographs of the interior and exterior of the home. The appraiser will take note of the age and design of the home, the improvements made to the house and any amenities such as a pool, views, or updates to the style of the house. Less desirable characteristics of the home like living near a railroad track or busy highway will also be considered in determining the home’s value.
• Once complete, the appraiser will send the Uniform Residential Appraisal Report to the mortgage lender and share the report with the buyer if a sale is involved and with the owner if the transaction is a refinance.
For more information about the closing process, please contact your Heritage Title Company Escrow Team. We make it our priority to deliver consistent, high-level closing and escrow services to our clients.