The Home Appraisal Process

Learn how a home appraisal works and affects your home loan financing

When you're looking to buy a home, sell a home, refinance your house or even apply for a home equity loan or line of credit, the appraised value of the property will be a major factor in the financing. Take a moment to review the home appraisal process so that you know what to expect and can appropriately budget for home appraisal costs.

What is a home appraisal?

A home appraisal determines the market value of your property. It's based on the educated opinion of a professional home appraiser who evaluates your home as well as the real estate market in your neighborhood. The home appraisal process is not as detailed as or equivalent to a home inspection. In a home inspection, a certified contractor or home inspector examines your house from top to bottom and tests all appliances, systems and the structural integrity after you've placed an offer. The appraisal will note those features of your home which add to or subtract from its value, but the appraisal will not indicate things that should be fixed.

Where do I find an appraiser?

Luckily, this is a part of the home loan process that is simple. Your lender will recommend and possibly arrange for a professional licensed appraiser to perform the home appraisal, saving you the time of finding a person and confirming his or her credentials. If you find a lender that doesn't provide this service, check with the local Better Business Bureau for recommendations.

What does the appraiser do?

The appraiser will generally have a multi-page checklist that he or she will work through. To form an accurate opinion of the home's value, the appraiser will look at two sources of information:

  • The home itself: The appraiser will visit the property and note the condition of both the interior and exterior of the home. For example, the appraiser will inspect the quality of the heating and cooling systems, interior floors, windows and walls, the foundation, roof, exterior walls and any garages or sheds on the property. If you have extra features like fireplaces, a pool, a fence or a deck, the quality of those items will also be noted. The goal at this stage in the home appraisal process is to determine the quality and associated value of the home's features.
  • Similar homes in your neighborhood: In order to put the home appraisal in context, the appraiser will research the property details and recent sale prices of similar homes in the neighborhood. These homes are called comparables, or comps for short. The appraiser won't tour these homes, but instead will look at public records to find basic information like lot size, square footage, number of rooms, age of the home and extra features like fireplaces, garages, etc. Appraisers tend to choose homes that have sold in the last few months in order to get a sense of a reasonable market value.

How much does a home appraisal cost?

While the work of an appraiser is certainly thorough, it's not a huge expense. Home appraisal costs are usually included in the closing costs you'll pay, if any. To learn how much the home appraisal might cost and how the bill will be paid, contact a home loan originator at Citizens Bank.

Find more information on home loans from Citizens Bank

If you've considered online home value assessments, be aware that they are not always accurate. Working with a certified appraiser will give you much more precise results. Additionally, the lender will almost always require the report of a professional appraiser.

The home appraisal is just one of several steps in the home equity, refinancing and mortgage process. It's very common for homeowners or potential home buyers to have plenty of questions, so be sure to reach out to a Citizens Bank home loan originator at 1-888-333-1206.


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