Some people may be under the impression that a home appraisal and a home inspection are the same thing; they are not. In some cases during the process of selling home to both a home appraisal and a home inspection may be required by different parties. A home inspection generally gives the buyer property information about any potential costs or problems. The home appraisal is the determination of the value of a property.
The factors that are taken into consideration when doing the home appraisal may also be a surprise to some people. While the general condition of the building or buildings on the property are taken into account this is generally not the most important factor in the valuation of a property. It is usually more important that a home appraisal take into account the value of properties in the area.
A home appraisal should provide examples of similar homes in the area and their values. This can give the homeowner or lending institution insight into a property’s value. Many people wish to believe that the value of their home is tied to what they paid for but in fact it is the market price that determines what a home is worth.
You may be surprised to find that somebody doing a home appraisal does not spend a large amount of time inside the home. It is also not uncommon to see a home appraisal done without the appraiser even entering the home.
The home appraisal generally does not only include information about the market value of a property but also things like a long it might take for that property to be sold on the market. While this is not directly related to how much the property is worth, it might be pertinent information to a lending institution that is considering offering financing to a buyer.
A home appraisal will include information like the area of the home and the area of the property. Buildings that are considered permanent structures will be taken into account but not all structures on the property will be included in the determination of the value. If a non-permanent structure like a garden shed, hot tub or above ground pool is present these will not be included in the valuation of the home.
The home appraisal can also provide information that relates to the property like ease of access or infrastructure in the area of the property. These can affect the value of a property and they are things that cannot be changed by the property owner and therefore are included.
If you are paying for a home appraisal, insist on the professionalism and confidentiality of the individual or firm that you hire. The information in the home appraisal and the valuation of the property should only be disclosed to the person whose contract the services of a home appraiser. If it is the lending institution that has asked for and paid for a home appraisal you should be aware of the fact that they can choose to share with you the findings of the home appraised but they are not obligated to do so.
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