An appraisal report is used by the lenders to determine if the agreed upon price to purchase a home (between buyer and seller) is in-line with the current market value of homes in the area. The lender will need to assure the best possible value of the home. A lender has to feel comfortable – in lieu of default by the borrower – their money will be re-cooped or with minimal loss. To determine the value, an appraiser accounts for a lot of data to verify the purchase offer is in-line with market values. Due to the gathering of data and governmental requirements, the process could be lengthy.
During the lengthy reporting process, an appraiser will account for size of a home, the number of bedrooms, bathrooms, recent selling prices of homes, condition of a home, is the home close to hospital, fire station, or police department/station, and style of homes. Location is often a factor. However, in rural areas, expanding the location search area is frequently needed. Collecting this information to compile a comprehensive report can take between 2-3 weeks – from the time the appraisal has been ordered by the lender or yourself and when the report is completed. With the abundant of information needed for the report, providing relevant information for the appraiser could help improve the duration of the process and reinforce the validity of the purchase price.
Once the appraiser receives the request for a report, he/she will contact your Realtor or in the case of a For Sale By Owner (FSBO) contact you directly to obtain access to your home. Once you know the date of Appraiser’s visit, make sure your home is ready to go. On the day of the visit, take a moment to cut the grass, remove weeds, clean up around and in the home, turn on all the lights, open the curtains/blinds, and provide minimal amount of air freshener.
Also, you or your Realtor could provide some of the marketable data used to determine and support the agreed upon purchase price. Having a list of recent updates, significant changes to the home (finished basement, new bathrooms, updated kitchen, etc.), new furnace, septic, water well, roof, and/or water heater are all great information to provide during the appraisal visit.