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You can expect to need an appraisal completed if you are purchasing a new home or if you are refinancing your first mortgage and you do not have a valid complete interior inspection appraisal that has been completed within the last 90 days.
An appraisal provides an estimated value of your home based on current market conditions and many other factors including the condition of your home. You can expect to have an appraisal required for most mortgage related transactions. In most cases, the mortgage broker will make the arrangements to have your home appraised for you during the loan process.
Once the appraisal has been ordered the appraiser will contact you to make an appointment to complete the inspection. It is necessary that someone be available to let the appraiser in as, in most cases, an interior inspection will be required. The entire process takes about an hour and the appraisal will complete interior and exterior measurements along with taking exterior (and perhaps interior) photos.
The actual inspection process is simply the begining of the appraisal process but it is the only portion that you, as the customer, will be involved in. The appraiser will locate 3-4 (perhaps more) similiar properties that have recently been sold within a reasonable timeframe from the date of the inspection. These "comparables" as they are referred to are normally required to be less than 1 year from the date sale for use in your appraisal valuation. The comparables will be used to determine the present value of your property based on recent sales of like properties in your market area.
The appraisal valuation will normally be completed within 5-7 days and the completed appraisal will be sent to the broker, or lender, that ordered your appraisal to send in with your loan package. The appraisal is an essential part of your mortgage transaction as it will determine the value of your property thus determining a maximum loan amount for your transaction.
You can expect the cost of the appraisal to be between $325.00 - $500.00 or more depending on the size and value of your property. If your property is valued in excess of $500,000.00, then you can expect to pay anywhere from $500.00 - $1000.00 for an appraisal.
