How much is your property really worth? You may have a decent idea based on your real estate agent’s opinion, your tax assessment, and your personal knowledge of the real estate market. Nevertheless, these pieces of information do not replace an expert’s advice. That is where a home appraisal comes in.
There are many times when knowing the value of your building for sure is necessary. An appraiser is a third party who can provide an educated, unbiased opinion of value. Therefore, he or she can prevent many future issues between you and the other parties who may have an interest in the real estate deal, such as buyers, sellers, lenders, heirs, authorities, etc.
Here is everything you should know about home appraisals.
When should you hire an appraiser?
A home appraisal is necessary whenever the value of a house is in question. You may need a mortgage to buy a home or refinance it. In those cases, the lender usually hires the appraiser. Much like a home inspection, it is one of the associated costs you should expect from purchasing a property. Rest assured to know that, even though the process can be stressful, it will protect you in the long run.
It is also useful if you are planning to sell your property quickly and want to know accurately how to price without relying solely on your real estate’s agent opinion. Unlike your Realtor who works for a commission, the appraiser has no personal or financial interest in the transaction.
You should also hire an appraiser if the property’s value could be involved in a conflict, settle an estate, a divorce, or dispute a tax assessment, for example. A judge will likely order for an appraisal if the house’s value is in question.
What does the appraisal process look like?
A home appraiser inspects the property and prepares a detailed report providing an opinion of value, using several comparable homes to support his or her findings. Since no two houses are the same, the appraiser will adjust each comparable property based on whether it is better or worse than the subject. For example, the location may be more desirable, or the house may have been updated recently.
Appraisers go through an intensive training and education process. They must also obey strict rules and guidelines. Not respecting these regulations could put their license in jeopardy.
Each report is prepared for a specific purpose, and it cannot be used interchangeably. Since a house value is subject to change, you may need to have your house appraised several times to provide an accurate value, especially if the housing market in your area is evolving rapidly.
How much does a home appraisal cost?
As it is often the case in real estate, how much you should expect to pay for a home appraisal varies widely depending on many factors. Where you live, the size and features of your house, your timeline, etc. all influence the cost of the appraisal. According to a 2019 study, the typical price range for a home valuation is between $311 and $404. However, a complex assignment could reach over $1000.