Whether you're buying, selling, or refinancing your home, a home appraisal plays a crucial role in the process. Learn what it is, how much it costs, how long it takes, and how to prepare for it.
What is a Home Appraisal?
A home appraisal is an unbiased, professional evaluation of a property’s value, typically conducted by a licensed appraiser. The appraisal determines the fair market value of a home based on factors like location, size, condition, and comparable properties (also called "comps").
Lenders use appraisals to ensure the home is worth the amount they are lending, while buyers and sellers use appraisals to verify that the property is priced fairly.
How Much Does a Home Appraisal Cost?
The cost of a home appraisal can vary based on several factors, such as the location of the property, its size, and the type of property being appraised.
On average, a home appraisal can cost between $300 and $500. For larger or more complex properties, like multi-family homes or those in less accessible areas, the cost can be higher.
The appraisal fee is usually paid by the buyer or borrower when refinancing, although this may vary depending on the lender’s policies.
How Long Does a Home Appraisal Take?
The home appraisal inspection typically takes 30 minutes to an hour. However, the entire process, from scheduling the appraisal to receiving the final report, usually takes 1 to 2 weeks.
After the appraiser inspects the property, they gather data, analyze comparable sales, and finalize their report. The time frame can also depend on the complexity of the property or the appraiser’s schedule.
What Can Hurt a Home Appraisal?
Several factors can negatively affect a home appraisal and potentially lower the property’s value:
Poor Condition: If the home is in disrepair, it may be appraised for a lower value.
Outdated Features: Homes with outdated appliances, fixtures, or décor may be valued lower compared to those with more modern upgrades.
Location: Homes in less desirable neighborhoods can be appraised for a lower value.
Overpricing: If the home is listed at a price higher than comparable properties, the appraiser may adjust the value to reflect market conditions.
Lack of Upgrades or Curb Appeal: Homes with poor curb appeal, limited maintenance, or no major system updates (HVAC, plumbing, etc.) often appraise for less.
How to Prepare for a Home Appraisal
Proper preparation can help ensure a favorable appraisal. Here’s how to prepare:
Clean and Stage Your Home: A well-maintained, clean, and organized home creates a positive impression.
Make Necessary Repairs: Fix any visible issues like broken windows, leaking faucets, or peeling paint. Even small fixes can make a big difference in the appraisal value.
Provide Access to All Areas: Ensure the appraiser has access to all parts of the home, including the attic, basement, and outbuildings.
Highlight Home Improvements: If you’ve made any significant upgrades (e.g., remodeled kitchen, new roof), inform the appraiser and provide receipts or documentation to back them up.
Prepare Comparable Sales Data: If you are aware of any comparable homes in your area that have recently sold for a good price, provide this information to the appraiser.
Stay Out of the Way: When the appraiser is on site, it’s best to stay out of their way to allow them to perform their work without interruption.
Final Thoughts
A home appraisal is a critical component of the buying, selling, or refinancing process. It helps ensure the property is worth the investment and provides peace of mind for both buyers and lenders. By understanding the process, knowing what factors can influence the appraisal, and properly preparing, you can help ensure a smooth and successful home appraisal.