If you are securing a new loan to purchase a home, your 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 and are similar to yours in size, age, construction, and amenities.
The appraiser will make an appointment to see the home and will take about 30 minutes to an hour to look over the property. They will measure the home, draw a representative floor plan, take photographs inside and out, and review the property’s condition, specific improvements, and amenities. You can help the appraiser by providing a list of any improvements or remodeling completed since you bought the house along with an approximate dollar amount for each improvement. Keep in mind that remodeling projects rarely bring a 100 per cent return on investment, but a list will ensure the appraiser doesn’t overlook the added features.
The appraiser will provide a typed appraisal report to your lender within a few days after visiting the home. The Seller will be notified if the lender requires repairs before they will approve your loan to purchase the property. If specified in the contract, these repairs must be made. The appraiser will have to return to review the required repairs, and a re-inspection fee will be charged.
Note: If you are applying for an FHA or VA loan, the property will have to meet certain requirements. Chipped or peeling paint on any structures on the property will have to be scraped and repainted. Missing or damaged shingles and missing slats or blocks in the 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.