What is an appraisal?
An appraisal is an independent evaluation of the fair market value of a property.
When you purchase or refinance a home, your lender will want to confirm that the value of the property is sufficient to secure the funds they are loaning you. To do this, an independent third party who specializes in evaluating properties is hired to prepare a report called an appraisal. The appraisal compares the “subject” property to different properties closely located to the subject property that have sold within the last 6 months and provide a report back to the lender that expresses their opinion of value. These reports are typically between 35 – 40 pages long and involve a visit to the subject property, visits to comparable properties, picture taking and internet/MLS research to pull specific characteristics of each property they are addressing.
After the appraiser’s work is complete, they express an opinion of value on the “subject” property – the report documents the facts used to reach their conclusion.