10.23.2023

Navigating the Home Appraisal Journey

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Written by Sabrina Maas - Mortgage Loan Officer, Brighton Branch

Congratulations!! Your offer has been accepted, the inspection went well, you have received, reviewed, and signed your loan disclosures, and now it’s time for the appraisal.

What happens during the appraisal process and what should you be mindful of? 

  • The appraiser will contact the listing agent to schedule the date & time of the appraisal.

  • The Buyer(s) will be notified of the scheduled date & time once confirmed. 

  • There is no specific rule that says Buyers cannot attend, but the process is typically handled by the appraiser alone. 

  • For the most part, this is a hands-off process for both the Buyer and Seller. It’s the financial institution that orders the appraisal due to the fact the appraisal protects the financial institutions interests.

What happens during a home appraisal?

  • The appraiser will visit the property and compare it to recently sold homes to determine its value, take pictures inside and out, make necessary adjustments, and add recently listed homes to the report as well.

  • If the home appraises at or above the agreed-upon purchase price, the loan will likely move forward.

  • If the home appraises for less than the contractual purchase price and there is no Appraisal Guarantee per the Purchase Agreement Buyer & Seller may renegotiate, the Buyer can back out, OR the Buyer can choose to pay the difference of the “appraised value and the purchase price”, if the funds needed to do so are available.

What is the Appraiser looking for?

The appraiser will examine both the interior and exterior of the home. The appraisal process begins before the appraiser even shows up to look at the property. The Appraiser will have done their homework and be prepared with a file in hand containing all kinds of market data and pricing information, including the comparable sales and the fully executed purchase agreement.

They use sales data to understand what the local real estate market is doing, and how much homes are selling for in the area.

Appraisers will review the following:

  • Lot size, view, curb appeal, square footage

  • Value-adding features, upgrades, or additions

  • Quality of construction and overall condition of the property

  • Structural integrity

  • Property type 

  • Whether or not the property conforms to the neighborhood

  • Room count, including bedrooms, bathrooms etc.

  • Recent Sale and Ownership history

  • Property Taxes and Association fees

  • Anything else that might add or subtract value, or make the home different from the comps

The appraiser evaluates what the house is worth in the current, local real estate market.

Reporting Back to the Lender

The appraisal report is a standard document which includes details regarding the property, surrounding market, possible repairs needed, and an actual “value” assigned to the house. This is an educated guess of what the home is worth in the current market. Turnaround time from the date of the appraisal to the date the report is received is 3-5 business days.

Don’t hesitate, call Michigan First Mortgage at 877.312.9033 to speak with an experienced Loan Officer today!

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