It’s normal to feel overwhelmed when starting the home buying process. Most people have saved and planned for years to accomplish their goals. But what’s next in the process? Homebuyers will work with a team of mortgage professionals to ensure your closing goes smoothly. From your mortgage lender to your home appraiser, each mortgage professional plays an integral part in making your dream a reality. Understanding who’s who in the homebuying process can help prepare you for what’s ahead. Today we’ll tell you everything you need to know about your home appraiser and their role in the mortgage process.
Who is the Home Appraiser?
A home appraiser is an individual who is licensed to estimate the worth, or fair market value of the home that you’re purchasing. Appraisers conduct a room-by-room inspection to determine the house’s actual value and provide a detailed report. That detailed report can help lenders and homebuyers determine if the home purchase is a good investment.
What do Appraisers Check for?
Appraisers are detailed oriented in their inspections and provide a full detailed report of their findings. During their on-sight inspections, appraisers will check the following:
- The layout of the home and inspect the square footage to determine if it’s a single-family home
- The condition of the interior by conducting a room-by-room inspection
- Any health or safety code violations the homebuyer should be aware of
- Any amenities, like a swimming pool or finished basement, and provide the fair market value
- The condition of the exterior property to determine the value both inside and out
Appraisers don’t just work on-site. Behind the scenes, they also research the value of similar properties in your area and evaluate the current real estate market to help determine the home’s value.
Who Hires the Home Appraiser?
Your mortgage lender typically hires the home appraiser. Lenders will have a list of reputable appraisers they’ve worked with before to ensure a thorough and fair appraisal is completed. Most appraisers are licensed by the state or have other certifications, like from the Appraisal foundation. Your lender’s experience can help them select a qualified and trustworthy appraiser for the process.
Who Covers the Cost of the Appraisal?
In most cases, the person who takes the loan out covers the cost of the appraisal unless the loan agreement states otherwise. The buyer will then pay that appraisal fee in the closing costs. In some cases, motivated sellers will include the cost of the appraisal fee in the seller’s concessions. However, homebuyers should be prepared to cover the cost in closing unless it was explicitly outlined in the loan agreement or seller’s concessions.
Why Home Appraisals are Essential
Home appraisals protect the homebuyer and the lender when it comes to a home investment. Most appraisals only take a few hours but can provide a wealth of knowledge regarding the fair value of the property. Your home appraisal can give you peace of mind that you’re getting a fair deal on your home and can help with the loan approval.
About Michigan Mortgage Lender, Julie Krumholz
Julie Krumholz is no stranger to what goes into the home buying process for a smooth transition to homeownership. For over 35 years, Julie has been a trusted resource and friend to homebuyers. Julie has worked in processing, closing and loan origination, underwriting, QC auditing and has even co-owned a mortgage brokerage firm. She applies her knowledge to help first-time and seasoned homebuyers alike make their homeownership goals a reality.
Call Julie at 586-382-5482 for all of your home buying needs!