Before lending any money for your mortgage transaction, your lender needs to determine the fair market value of the property in order to ensure the loan will be secure in the event of a default. This is done by acquiring an appraisal valuation from a third-party professional who evaluates the property and creates a detailed, objective report. This report takes into account property size, features and the sold price of “comparable sales” – similar properties recently sold in the surrounding area.
It's not just the lender who needs to ensure that the property is accurately valued – an appraisal also helps you to avoid overpaying for your property. Through an appraisal valuation, you can get the peace of mind that comes with knowing you are paying fair market value.
Preparing for an Appraisal as a Homeowner
If you are the homeowner of the property being appraised, it’s important to know what to expect and how to prepare for it.
To complete your appraisal report, an appraiser will be looking at the overall condition of the interior and exterior of the property in what’s called an appraisal inspection. Part of that process involves walking through every room of the house and both the front and back yard to measure and take photos.
Here are a few things to keep in mind when preparing for your inspection:
- If someone will be meeting the appraiser at the property, they must be at least 18 years old.
- The appraiser will need access to the entire house and yard (including closets, crawlspaces, garage, attic, outbuildings, patios, pools, etc.), but it does not need to be spotless.
- Please kindly keep children and pets in a different location as the appraiser inspects the property.
- You do not need to walk the appraiser through the property, but they may ask you some questions about things like your utilities (whether you receive public water service or use a well, public sewer service or a septic tank, natural gas or propane, etc.) They may check that utilities are in working order such as turning on lights and faucets.
Once your appraiser arrives, they won’t need much from you.
Your appraiser can answer any basic questions you have about the appraisal process, but they must stay within the guidelines of appraisal regulations and compliance. This means they cannot discuss the home value with you or be influenced in any way.
Next Steps
Once the appraisal report is complete, it will be sent to your lender for their review and approval.
The review process typically takes several days. Your lender will contact you if anything is required of you and provide you a copy of your appraisal.
