The Appraisal Process
If the Buyer is securing a new loan to purchase your home, the Buyer’s lender will require an appraisal to determine the “fair market value of the property”. A licensed appraiser will research nearby houses (within one mile if possible) that have sold in the last six months (or most recent) and are similar to yours in size, age, construction and amenities.
The appraiser will make an appointment to see your home and will take about 30 minutes to an hour to look over your property. He will measure, draw a representative floor plan, take photographs inside and out, review the properties overall condition, and specific improvements and amenities. You can help the appraiser by preparing ahead of time (during the listing period) any and all improvements and remodeling projects completed since you purchased your home. Include a cost or receipt for each of the items if possible. Keep in mind that remodeling projects rarely bring a 100% return on investment, but a list provided to the appraiser will ensure the appraiser doesn’t overlook the added features.
The appraiser will provide a typed appraisal report to the Buyer’s lender within a few days after visiting your property. You will be notified of the results only if the lender requires repairs before they will lend on your home, or if the home did not appraise for at least the agreed upon sales price. If specified you must repair these problems, the appraiser will have to return to review the required repairs and a re-inspection fee will be charged.
Note: If the Buyer is applying for an FHA or VA loan, your property will have to meet certain requirements. Chipped or peeling paint on any structure on the property will have to be scraped and repainted. Missing or damaged shingles and missing slats or blocks in your fence will have to be replaced. Other improvements also may have to be made before the escrow can close. Your Realtor should be able to advise you on the latest FHA/VA requirements during your listing appointment.
Typically the Buyer pays for his/her own appraisal, but it is a negotiable item and the Buyer my ask you to pay for this, or it may be included in the Buyer’s closing costs that he/she is asking the Seller to assist with paying; very common in todays market.