A home appraisal serves the important purpose of providing an accurate measure of a property’s value. This valuation is essential for a mortgage lender because it ensures the organization that it isn’t letting homebuyers borrow far more than what the house is actually worth. This measurement doesn’t just affect the lender, but it also protects the homebuyer from significantly overpaying for a home. As important as appraisals are, many homebuyers and sellers are confused about exactly who performs these appraisals, how they are created, and what standards are used. Find out what you need to know about a home appraisal.

Who Conducts Home Appraisals?
A home appraisal can’t be performed by a lender or any party that would stand to benefit from a certain appraisal outcome, such as an especially high or low appraisal. Instead, the process is carried out by an independent, professional appraiser.

There are different requirements for home appraisers depending on which state they’re working in and, in some cases, depending on what type of property they’re appraising. In nearly all cases, however, appraisers will need to complete courses on home appraising, work in an apprenticeship and complete a certain number of on-the-job hours. Once these steps are complete, appraisers are required to pass state exams to become certified. Home appraisers also have the option of earning different levels of certifications, which allow them to appraise homes with different value levels and sizes.

What Do Home Appraisals Include?
Home appraisals are based on several factors, which may vary depending on a home’s age. For most homes, appraisers use comparable property types to help determine the home’s value. This means they consider the asking prices and purchasing prices of homes in the area that have recently been sold. Home appraisers may compare homes that have similar lot sizes, square footages and features as the home that is being evaluated.

If a home is newer, the appraiser is more likely to use an approach that involves estimating the land value as well how much it would cost to completely replace the house.

The appraiser also takes other details into account, including the integrity and quality of a home’s foundation, roofing, siding and overall structure. He or she will also check on the quality of the interior, including such aspects as the doors, windows, plumbing, flooring and whatever appliances will remain in the home.

While many potential homebuyers and home sellers may be focused solely on the house, appraisers actually take the entire plot of land into consideration. They typically examine the size of the front and back yards and check for any permanent landscaping or lawn fixtures, and evaluate features like pools, decks, patios and hot tubs.

Appraisers will also check for any significant home upgrades, especially improvements in the bathroom or kitchen. If you’re the seller, it can even be helpful to give your appraiser a list of all the updates you’ve made to the home while you’ve owned it. This can ensure that nothing gets missed and that the appraiser takes these details into account.

Getting an accurate home appraisal is a vital aspect of having a successful home sale. Whether you’re the buyer or the seller, it helps to remain informed about exactly what aspects are being considered during the appraisal process.