A real estate appraisal is required by mortgage lenders prior to them approving your home loan. The appraisal must state that your home is worth the amount you are borrowing against it. This is to ensure the lender can sell the home to get their money back if you are unable to pay back the loan.
The cost of the appraisal process is generally part of the closing costs. The majority of appraisals are paid for by the buyer. However, there are some sellers who agree to pay the cost of the appraisal in an effort to help their home sell faster. The cost of a real estate appraisal varies by area, but it is generally at least a few hundred dollars.
It is important to have your appraisal done by a reputable agent who is qualified to make such determinations. You can find a good appraiser in your area by asking other home owners who they have used. You can also ask your real estate agent to recommend someone. It is a good idea to check the background of an appraiser prior to working with them. There are several organizations that an appraiser can belong to including The Appraisal Institute and the National Association of Real Estate Appraisers.
The appraiser will complete all the necessary paperwork to submit about the appraisal process. This gives you a great itemized worksheet to use regarding the value of the home you are looking to purchase. The appraiser will base the dollar amount value of the home on the market analysis, what the home has to offer, the quality of the home, and the location of the property.
Real estate appraisals are a very common part of the home buying process. This is a great way for you to find out if the home you are looking at is worth the price the buyer is asking. You can use the information in the appraisal to help you negotiate a lower price if the appraisal is less than the asking price. Lenders will generally only approve a home loan if the appraisal is for the cost of the loan or the home is appraised at a value higher than the amount of the loan.