Anyone who has spent even a short amount of time in their own home can attest to the sentimental value inside those four walls. Memories of birthdays and holiday dinners, a child’s first steps, and backyard parties all add to our personal valuation of our homes.
But when you’re looking to sell or refinance your home, buyers and lenders are more interested in the property’s fair market value. To receive an official report of your home’s worth for these purposes, you’ll need to look into getting a home appraisal.
If you need a mortgage to buy a home, your real estate agent will likely suggest that you include an appraisal contingency in the sales contract. The appraisal contingency lets you walk away from a home purchase if the appraisal comes in too low to justify the agreed-upon purchase price.
If you’ve never had to schedule an appraisal before, there’s no need to stress about it. Step by step, we’ll be showing you how to get a home appraisal. The process for selling and refinancing is nearly identical, so we’ll be outlining them side-by-side. We’ll also touch on some other tips and tricks to set you up for success.
Getting an Appraisal: 5 Easy Steps
Whether you’re selling your home to buy a new one or refinancing to stay at your current address, you’re almost guaranteed to need an appraisal. Wondering what the home appraisal process looks like? Here’s how to get your house appraised, from start to finish.
1. Research and Choose Your Appraiser
There are two options at the beginning of the home appraisal checklist: hiring an independent appraiser or working with an appraisal management company (AMC).
Independent Home Appraisers
Before we continue, it’s important to note that it’s becoming increasingly unlikely you’ll work with an independent appraiser. Why? If a lender is involved—either with the person buying your home or the bank refinancing your mortgage—they’ll want you to go through a third-party appraisal management company (AMC).
However, there are still cases where you might want to hire an appraiser directly. These include:
- Attempting to modify property tax amounts
- Getting an idea of your home’s worth before listing it
- Obtaining a second opinion
Should you decide to engage an independent appraiser, be sure to spend time looking at reviews, testimonials, and accreditation. The real estate industry also relies heavily on word of mouth, so speaking with fellow homeowners is an excellent way to find trustworthy appraisers. Most importantly, try to find appraisers who have experience assessing comparable homes.
Because banks can be wary of bias from an independent appraiser, they’ll typically ask you to work with a third-party AMC. Federal guidelines state that a professional appraiser must be impartial, and the use of an AMC allows both sides to ensure the appraiser is knowledgeable and unbiased. You won’t need to do much research with an AMC since the idea is that you can’t choose who assesses your home.
- For sellers – Unless you’ve secured a buyer who plans to purchase your house with cash-in-hand, they’ll probably need a mortgage. Their bank will ask them to have an appraisal done by an AMC, so you can work with your mortgage lender to secure an appraisal.
- For refinancing – Your bank will want to go through an AMC, so there’s no need to research independent firms.
Regardless of whether you hire an independent appraiser or AMC, make sure to pick a licensed appraiser.
2. Prepare Your Home for Appraisal
When readying your home for a visit from an appraiser, think of it as staging your home for a sale. Tips for preparing your home include:
- Make repairs – Appraisers are looking for a home that’s been well taken care of, so try to fix any obvious issues before their visit. Look out for leaks, cracks, and other signs of wear and tear that might cause an appraiser to think twice.
- Invest in renovations – If you have some extra time and money, upgrades to countertops, cabinets, hardwood, and heating systems can really increase your valuation. Appraisers typically value houses in increments of $500, so a handy rule of thumb is to update something only if it adds $500 or more to its worth. In this case, you may want to look into home improvement financing options before you go ahead with a home renovation.
- Don’t forget to clean up – A deep clean will help with the first impression, and it’s worth taking some time to declutter. This could also mean boosting your home’s curb appeal. With that said, there’s no need to spend days cleaning—home appraisers know that people live in your house and won’t dock points for a minor mess.
Staging is necessary to increase your property value. It’s your way of proving to the appraiser that your home’s condition is good. If the appraiser doesn’t think your house is good enough, neither would any home buyer.
3. Schedule the Appraisal
Whether you’re working with an AMC or an independent evaluator, it’s wise to schedule the appraisal as close to the sale of your home as you can. Ideally, you’ll be able to fit them in as soon as possible unless you need some time to complete renovations.
Scheduling the appraisal closer to the target date means the report will be accurate and up-to-date.
It can be harder to schedule an appraisal in a rural area on short notice, as there can be personnel shortages. If you live far outside of the city, planning is highly recommended.
What To Do On The Day Of The Appraisal
On appraisal day, be sure that someone is there to greet the home appraiser and let them in. After you’ve given them entry to your home, it’s best if you, your family, and your pets leave the property. However, if you’re getting an assessment for refinancing, you may want to join the appraiser to point out any improvements they may miss.
Appraisals typically last from 30 minutes to 2 hours, depending on the size of your property. The appraiser will snap photos of every room, inspect the structural integrity of the building, and take some measurements.
The Cost of an Appraisal
For a single-family home, the appraisal fee will usually be between $300 and $500. For larger homes, the home appraisal costs may come closer to $800, depending on where you live. A certified appraisal is good for around four months, so don’t book too far ahead, or you’ll need to order another visit.
When you’re seeking a home appraisal for a refinance, you’ll have to foot the bill. If you’re selling your house, you may be able to negotiate home appraisal costs and have the buyer pay for the assessment, but there’s a good chance that responsibility will fall on you, too.
4. Go Over the Appraisal Report
Roughly a week or two after the home appraiser visits, they’ll send out the completed report. In general, you won’t see the finished evaluation, as the appraiser will deliver it directly to your mortgage lender or real estate agent.
But if you want to see the report, or feel that the home’s appraised value was too low, you may wish to request a review. This step of the appraisal process might involve sitting down with the appraiser or your bank to go over the details and home appraisal value factors.
If you received a low appraisal, look out for any errors in the paperwork. Mistakes happen, and the omission of a bathroom or amenity can wrongfully bring the appraisal value down. You would definitely regret not fighting your home’s worth. Be sure to research what comparable homes were appraised for in your area.
5. Follow Up With Your Realtor or Bank
Once you’ve received the appraisal report and everything is in order, you’re all set to move on in the process. If you’re selling, that means meeting with your realtor or real estate agent; if you’re refinancing, a trip to the bank is probably in order. Either way, they’ll help you along with any next steps.
Home Appraisal vs. Home Inspection
Sometimes the terms “home appraisal” and “home inspection” are used interchangeably, but they aren’t the same. It’s worth taking a moment to differentiate these two types of home visits.
- A home inspection is a detailed investigation of your house. A thorough inspection can last hours, as an inspector looks at the inner workings of the home. They will test HVAC systems, check the roof, and scrutinize the plumbing. A home inspector’s goal is to ensure everything has been correctly installed and is in working order.
- A home appraisal is less thorough. While they will spot any visible issues—such as cracked walls or damaged hardwood—and account for them in their report, they don’t dive deeper. Their assessment is more of an overview of your property value, not a confirmation that your outlets work.
The bottom line? When you’re selling your home, you’ll likely need both an appraisal and an inspection. For refinancing, an appraisal will suffice.
Why Home Appraisals Matter
An appraisal is a neutral, unbiased opinion from a professional. Because everyone has a stake in the home’s value—from the bank to the buyer to you—an objective assessment is a must.
When you’re selling your home, the buyer’s bank wants an appraisal. And when you’re looking to refinance your mortgage, your bank wants the same. And when you’re thinking of applying for a home equity loan or a home equity loan alternative, a house appraisal is just as necessary because lenders base how much they can loan you based on your home’s value. In short, if a house is changing hands, an appraiser will almost always be present.
Appraisals also tell you how much you need to improve your home to improve its market value. For example, maybe your kitchen needs some more work, so you can then consider kitchen remodel financing. The point is, there’s a lot you can learn from appraisals.
Making New Memories with a Sale-Leaseback
Whether you’re researching how to get a house appraised because you’re selling or refinancing, one thing is for certain: an appraisal is the first step towards something big. It’s a chance to make new memories—either in your current house or another.
If you’re looking to raise money for your next property but aren’t ready to say goodbye to your humble abode, a sale-leaseback program may be the solution for you. But how does a sale-leaseback work ? A sale-leaseback puts cash in your pocket while you remain in place, without typical credit score requirements. By selling your home and converting your home equity to cash, you can get the money you need upfront and stay put for another round or two of birthdays and holidays—after an appraisal, of course.
Obtaining a home appraisal is important for many reasons in real estate as it provides an objective assessment of your home value. If you’re selling, an appraisal gives you an accurate understanding of your property’s worth to set a fair sale price.
Nonetheless, The home appraisal process for selling and refinancing is nearly identical. We hope some of these tips and tricks
to will set you up for success. If you are still unsure of alternative options to refinance, after reading this article, consult a financial advisor to discuss your options.
- Bob Vila. How Much Does A Home Appraisal Cost? https://www.bobvila.com/articles/home-appraisal-cost/
- Investopedia. Home Equity Loan Definition. https://www.investopedia.com/terms/h/homeequityloan.asp