If you're thinking of having an appraisal done on your home, you want to know what goes into the appraisal in the first place. A real estate appraisal is something that is done during the home-selling process so banks financing home loans know that the borrower isn't borrowing more than a home is worth, and this is often the only time a homeowner has an appraisal done.
However, you can get a real estate appraisal done whenever you want, and this can be done by an appraiser of your choosing. Why would you choose to have your home appraised? What goes into the home appraisal process? This guide will help you understand more about appraisals so you can know what you're getting into.
The actual house
A home appraisal is mostly about the actual house involved. The home is appraised or valued based on its current condition and any upgrades that have been made to the home since it was purchased or built. Things like upgraded kitchens, new bedrooms, or upgraded windows can make a house worth more and increase its appraisal value. The home's market value and its appraised value are the not the same, so keep this in mind as you have your home appraised during a slow or recessed market.
The surrounding neighborhood
If you live in a less-than-desired neighborhood or near a public area that might be considered an eyesore, like a local scrapyard, airport, local animal shelter, then your home may not appraise as much as you might otherwise think it should. Your home's location has a lot to do with its appraised value, especially if your appraisal comes in on the lower side. If you want to refinance your home or put it on the market and you live in an area where home's don't appraise high, you can still raise your home's appraisal value by painting the house, upgrading to a steel front door, or doing other small changes that can make your home sell or refinance at a higher rate.
Your home's appraisal is important because you don't want to invest too much into a home when you won't get that value back out of it again. You also have the right to know what your home is worth so you can refinance, do an equity line of credit, or sell your home effectively. Your real estate appraiser will do an appraisal for you and give you your detailed appraisal results.