There are many steps to the homebuying and selling processes – and one of the common steps is a home appraisal. A home appraisal determines the value of a home and is important for both buyers and sellers. But if you’re new to the process, you may have lots of questions about it.
In this Redfin article, we’ll outline what a home appraisal is, why it’s important, and what you need to know before having a home appraisal. Whether you’re buying a home in Atlanta, GA, or selling your house in Madison, WI, these are the most common questions and answers about home appraisals – and the next steps you need to take when buying or selling your home.
Key takeaways
- Home appraisals are unbiased determinations of a home’s fair market value.
- The appraisal can take a few hours to complete, but up to 10 days to receive the report.
- If the home’s value is lower than the purchase price, buyers may be able to back out of the transaction.
What is a home appraisal?
A home appraisal is an unbiased professional opinion of a home’s market value. During the homebuying and selling process, a home appraisal is used to determine the home’s fair market value. This ensures that the home’s value is equal to or more than the mortgage loan amount. It is also used when refinancing a home. Lenders use home appraisals to make sure that they aren’t lending you more money than what the home is worth.
Who requests a home appraisal?
Once the buyer and seller have each signed the contract, the buyer’s real estate agent contacts the lender, who then books a certified home appraiser to evaluate the property. To ensure that the appraisal is objective, this appraiser must be a third party with no loyalty or ties of any kind to the lender, buyer, or seller. Their assignment is to state the facts about the home’s condition and value. Depending on how active the market is, the appraiser usually appraises the property within 48 hours of the lender’s…