What Actually Takes Place During A Bank Appraisal

With many homes going to contract, buyers and sellers are both going to be having their homes appraised.  The biggest question I receive is what actually takes place and when, so this brief blog will give you a general overview of what you should expect to happen and what your agent should be doing !

When Does A Bank Appraisal Take Place ?

• Typically your appraisal will be ordered within a week or so of your buyer applying for the mortgage, your agent whether your the seller or buyer should contact the mortgage representative to check on the procedures of each bank.  Some of the larger banks prefer to do the appraisal after all the documentation requested of the buyer has been submitted.  Most common banks that leave appraisal towards the end are Wells Fargo, Chase, and Continental Home Loans.  If your using a mortgage broker, than you are more likely to see the appraisal done sooner than later.  

Who Should Be At The Bank Appraisal ? 

• Whether I am working as a buyers agent or as a listing agent, I always attend my appraisals.  It is extremely important in my opinion for both agents to be involved to make sure that the appraiser is getting all the information that is needed, because without the home appraising properly it will not sell.  Appraisers are hired as a third party, so you want to take the opportunity to communicate with them and share your knowledge when you can.  
• The homeowners I often will not ask to leave the home during this process, depending on the appraiser and how thorough they are can take from 30 minutes to an hour.  When the homeowners are there for the appraisal we just ask that you allow the appraiser to walk through the home freely.  

What Does The Appraiser To While They Are There ? 

• The appraiser will typically note the numbers of rooms, size of the rooms, and take pictures to show the bank the condition of the property.  They will also take pictures of certain things specifically the heating system, electrical panel and roof.  They will also take measurements of decking or sheds to make sure the proper permits are in place for the home to have those items.  
• Either before or after, they will also scope out other homes in the area that recently sold which they found on MLS.  Once they have seen those homes although they can't go in, they must fill out a large amount of paperwork for the appraisal to be acceptable to the bank.  They will credit and debit for things as need to come up with the value of your home.   This is why real estate agents always insist on using the comparable homes in the area to determine your list price ! 

When Will The Appraisal Be Complete & Who Will See It ?   

• Appraisals will be sent to the bank within 48 hours of it being completed, remember they are hired as a third party.  The bank should notify the mortgage representative within a maximum of 5 business days as to whether the home appraised for.  
• The only one entitled to see the total appraised value is actually the buyer, as the seller your have the right to know if it was appraised high enough for the sale but not the specific number.  If your home does not appraise and did not include any sort of sellers concession than you will need to speak with your attorney to decide what negotiations you would like to go forward with.