A home appraisal is an integral component of the home buying process. It helps lenders decide how much money they’ll loan you for a mortgage.
If you are wondering how long does a home appraisal take, the process usually starts with a physical inspection of your home by an appraiser. They’ll inspect every room and take note of any major defects they notice. Furthermore, they conduct market research to compare your property to similar recent sales in your area.
The Appraisal Process
The appraisal process may seem intimidating, but it’s an integral component of the home buying process. It protects your lender’s investment and guarantees they won’t loan you more money than what a property is worth.
When valuing your property, an appraiser takes into account current sales and trends in the area as well as its size, location, and special features.
Typically, appraisals take two weeks to complete. This could take longer if you’re purchasing an expensive home or dealing with a busy appraiser.
One way to prepare for the appraisal process is by adding an appraisal contingency into your contract offer. This will give both you and the seller a chance to adjust your purchase agreement if the appraisal reveals a lower property value than agreed-upon price.
The Appraiser’s Workload
Appraisers conduct an intensive inspection of a property to estimate its market value. They compare the home with similar homes that have recently sold within 12 months, in order to arrive at their estimate.
Lenders require this process to ensure they don’t lend more money than the home is worth, in case the borrower defaults on their mortgage and goes into foreclosure. At that point, the lender would sell the house in order to recoup what they lent.
The appraiser’s workload plays a major role in how long it takes to complete an appraisal. Large homes require more time due to the sheer volume of items the appraiser must consider when making their assessment.
The workload of an appraiser can be affected by their schedule or work shortages in certain areas. With an abundance of requests for appraisals, it may become difficult for them to stay organized.
The Appraisal Report
A home appraisal provides the current value of a property to mortgage lenders. It plays an integral role in the real estate buying process for buyers, sellers and lenders alike.
A licensed appraiser will come out to your property and conduct an in-person examination, as well as research into local market trends and comparable sales to help estimate the home’s worth.
Following the inspection, they’ll begin compiling an appraisal report. This estimate serves as the final determination of your property’s value that mortgage lenders use when deciding whether or not to approve a loan.
Due to the complexity of the report, size of the property and appraiser’s schedule, it may take an appraiser anywhere from one day to a week for them to finish it.
The Closing
The home closing process begins when both buyers and sellers reach an agreement on a purchase price, then deposit their earnest money. At this point, the buyer’s lender will order an appraisal to verify that the home is worth its contracted price.
The appraisal is an integral component of the loan application process, and it helps your lender decide if you qualify for the mortgage amount needed to purchase a home. It also gives them an indication of how much risk they are taking by lending you money.
An appraiser will visit your home, assess recent sales and market trends, and perform a visual inspection of the property’s condition to establish its value. Once they have finished their work, they will compile a report outlining their findings and submit it to your lender for verification.
