Home/Residential Appraisal for Mortgage Financing

How an Appraisal Works

The appraisal happens after an offer to purchase has been accepted, but before the mortgage is advanced and the Buyer takes possession. Pre-pandemic, appraisers had to visit a property in person in order to determine its value. During COVID, however, sometimes appraisers will view a property either virtually (using photos) or in-person.

Appraisers are mandated to use very recent comparables – usually properties that have sold in the last 90 days. Appraisers do not judge a home’s value based on what happened before that, nor do they make predictions of what can happen.

Who pays for an appraisal?

This really depends on a few factors, most notably if the appraisal was done by a bank, prime lender, or alternative prime lender. Banks can pick up the cost of appraisals or they can add to the overall cost in the advance of the mortgage.

The goal of a bank appraisal is to justify how much a Buyer has agreed to pay for a home, and if  it aligns to the true value of a home.

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