A home appraisal and a home inspection are not the same thing.
This is one of the biggest points of confusion for homebuyers.
An appraisal determines the home’s market value for the lender, while a home inspection evaluates the home’s condition. Both are important, but they serve different purposes.
What Is a Home Appraisal?
A home appraisal is completed by a licensed appraiser who provides an independent opinion of the home’s market value.
The lender uses the appraisal to help determine whether the home’s value supports the purchase price
What Does the Appraiser Look At?
The appraiser considers several factors, including:
- The home’s size and condition
- Location
- Recent sales of similar homes
- Upgrades and improvements
- Overall market conditions
Their goal is to provide an unbiased opinion of the property’s value
What If the Appraisal Comes In Low?
A low appraisal doesn’t always mean the transaction is over.
Depending on the situation, the buyer and seller may renegotiate the purchase price, the buyer may choose to bring additional funds to closing, or there may be other options available.
I’ll explain your choices and work with your Realtor to help determine the best path forward.
Who Pays for the Appraisal?
In most purchase transactions, the buyer pays for the appraisal as part of the closing costs.
The appraisal is ordered through the lender and helps protect everyone involved in the transaction by providing an independent opinion of value.
Ready to Get Started?
If you’re thinking about buying a home, I’ll guide you through every step of the mortgage process and explain what to expect along the way.
Complete my Secure Online Application or give me a call. I’m here to answer your questions and help make the home buying process as smooth as possible.