The Importance of Home Appraisals: Understanding Their Role Beyond Being a Mandatory Requirement

A home appraisal determines the value of a property during a real estate transaction. The appraiser estimates the market price and compares it to the selling price to determine the market value. Appraisals are required by banks during mortgage applications and can be hired by sellers to help determine the asking price. Appraisers charge per hour or per square foot and are trained in evaluating real estate, estimating market values, and interpreting data. The appraisal is valid if the appraiser has no interest in the property, is competent, and has adequate experience. Appraisers estimate market value based on comparable sales in the area, the condition of the home, any improvements made, and updates or remodeling done. It's best to hire an appraiser to prevent potential problems in the future, especially if you're paying all cash, refinancing, or getting lots of equity out of a home. Appraisals are typically paid for by the person who hires one, but some lenders may pay for the appraisal fee.