Getting ready to sell your home or property? You’ll need to know how to get a home appraisal. That’s extra true if you’re an agent learning how to build trust with a client.
While different from a comparative market analysis (CMA), an appraisal is a monetary valuation of a house in order to determine the selling price and loan amount.
Banks and lenders use appraisals to determine the value of a home from its historical performance through the present day.
An appraisal is conducted to help banks avoid losses when lending, but they also play a part in determining the home’s overall financial value. Here is how to get a home appraisal, as well as what to expect throughout the process.
When Are Appraisals Needed?
An appraisal is needed when a homeowner has decided to sell their property. It’s also needed in order for the buyer’s bank to determine how much money they’re willing to loan. Read up on the basics of how to find a good real estate agent before you look for an appraisal, though.
If you’re learning how to get a home appraisal as a homeowner, be advised that banks usually have dedicated appraisers. They often require you to use their appraiser, or have specific and fair reasons for requesting otherwise.
Generally, appraisals should be handled before holding an open house. This helps both agents and sellers field questions from prospects later on.
How Long Does It Take to Get An Appraisal Report?
Based on the results of the appraisal, the bank may take one or two business weeks to get back to all relevant parties. It can take some time before they issue the report to both real estate agents and approve their loan to the buyer.
If you’re basing your appraisal on the best time to sell a house, make sure you get the appraisal done first. It’s always easier to market a property when you have this information in hand.
Know that if the bank allows you or the buyer to use a different appraiser, they may require that said appraiser’s report be more detailed than their own. This is because they’re an unknown entity to the bank and need more information to make a sound judgment.
What’s The Difference Between An Appraisal and A CMA?
Learning how to get a home appraisal includes knowing the difference between appraisals and CMAs. An appraisal from the bank’s staff is different from a CMA.
Banks use appraisals as their financial reference point when offering home loans–not CMAs. In the majority of cases, a CMA is conducted by the seller’s agent.
If the differences between CMAs and appraisals are still causing confusion, here are a few characteristics of both:
Key Characteristics of An Appraisal:
- Conducted by a licensed appraiser who works for a bank
- Based on the property’s history and any previous sales
- Performed to ensure the bank doesn’t lend more money than needed
Key Characteristics of A CMA:
- Conducted by a licensed real estate agent
- Based on trends in the property’s region and future expected performance
- Performed to ensure the lender
What Do Appraisers Look For?
Appraisers are in charge of evaluating properties from a financial perspective before they go on the market. This includes noting the overall condition, age, exterior, and square footage of the house.
Appraisers note any flaws the property has, too. For example, if the appraiser finds mold or water damage that occurred, this will be reported and will bring the home’s value down.
Note that appraisers are different from inspectors. An inspector checks utilities like electricity and gas, and appliances like the oven and stove. The inspector will also take note of the home’s overall operability and safety, including with lights, plumbing, and kitchen equipment.
How to Get An Appraisal
Ready to make it happen? Here is a basic overview of how to get a home appraisal:
- Speak with your agent. In the majority of cases, the seller’s agent speaks with the buyer’s agent to schedule the appraisal. The buyer’s agent will speak with the bank to determine their appraiser’s availability and then move forward.
- Review the appraisal report with your agent. Your agent should be reaching out to you with this information, too. Set aside time to discuss what the appraiser settled on and see if it’s close to your asking price.
- Consider a rebuttal if needed. Most of the time, appraisers do a great job and recognize the full value of the house. In the event the bank’s appraiser went too low, you can ask your agent for a rebuttal. Be advised that it’s difficult to rebut lenders’ appraisal reports; your own appraiser needs to find something of clear value that the first appraiser overlooked.
What Should I Expect From Appraiser Fees?
So the appraisal sounds good and all, but what about the costs? Appraiser fees vary depending on how long it takes them to evaluate the property. While the bank chooses the appraiser, the buyer is almost always the one covering the cost.
Appraisal fees also depend on where the property is and what local laws dictate. Some states require additional licensing from appraisers (which increases fees), while others do not.
The appraiser should state that their fees fluctuate based on additional costs incurred before completing their work. This is also true of inspectors. The larger the house or the more detailed evaluation there is to be done, the higher the fees typically are.
All of that being said, appraisals typically run between $300 and $425. This isn’t a ridiculously high cost, but sellers do need to be prepared for it.
Wrapping It All Up
Since you’ve learned the basics of how to get a home appraisal, it doesn’t hurt to verify the appraiser’s background, too. Find out if their license is valid and that they meet their industry’s requirements. Most US states require that appraisers be licensed while others have a certification process. All appraisers have codes of conduct to follow, which is their responsibility.
When you’re ready to sell your property, the appraisal is a necessary step. It will also help your agent settle on which real estate marketing ideas they use to market your home.
Whether you’re involved in a residential or commercial real estate transaction, that’s a significant investment that you deserve to get an ROI on. Working with an experienced, professional appraiser is a key step to desirable results.