The home appraisal process
Confirming the value of your new home
If you’re buying a home and your offer has been accepted, the next step is applying for your mortgage. As part of that process, your lender orders a home appraisal. It gives you a trained professional’s point of view on the fair market value of the home to make sure it’s in line with the purchase price. Bank of America customers can track their mortgage application with the Home Loan Navigator®.
Who orders and pays for the appraisal?
Your lender orders the appraisal to be performed by a licensed appraiser. However, you, the borrower, are typically required to pay for it. The cost appears on the Closing Disclosure as part of your closing costs.
What determines a home’s value?
When estimating a property’s value, appraisers consider:
- Comparable properties that have sold recently, especially those that are similar in size and location to the home you are buying. Their sale prices are usually the most important factor.
- General condition and age of the home
- Location of the home, including views or other remarkable features
- Size and features of the home and property, including the number of bedrooms and baths
- Major structural improvements such as additions and remodeled rooms
- Features and amenities such as swimming pools and wood flooring
What’s the difference between an appraisal and an inspection?
An appraiser does not necessarily look for potential defects in the home. That’s the responsibility of the home inspector. You hire an inspector directly if you are purchasing a home and want an itemized report of potential repairs or problems with the property. The appraiser instead focuses on whether the home’s agreed-upon purchase price is in line with what it is worth.
Appraisals are an important part of the mortgage loan process. Learn more about the other steps involved in buying a home so you can navigate them with confidence.
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