How Is a Home Appraised? Understanding the Home Appraisal Process

When buying or selling a home, understanding the home appraisal process is crucial. A home appraisal determines a property’s market value, primarily for the lender’s use. Several factors influence this valuation. Let’s dive into how a home is appraised and what you should know.

What Is a Home Appraisal?

A home appraisal is a professional assessment conducted to estimate the value of a property. This valuation is based on various factors and market conditions. The appraiser’s job is to provide an objective opinion on the worth of the home, taking into account recent sales, current listings, and market trends.

An appraiser will visit the home you are considering purchasing to start the process. He will then also drive the neighborhood in order to see the homes that have most recently sold as well as what is still on the market.

Key Factors in a Home Appraisal

1. Location: Not only does the neighborhood matter, but specifics matter too. Is the house on a busy street? That’s a negative. Is it in a cul de sac? That’s a positive. Does it back up to a school? That’s a negative. Does it back to a preserve? That’s a positive.
2. Size: The size of the home is another critical factor. Appraisers typically compare the home to similar properties within 15% of its size. Only livable space is considered, including continuous and finished areas. The number of bedrooms and bathrooms can also influence the appraisal.
3. Year Built: The age of a home affects its appraisal value. Homes built in different eras have varying levels of wear and updates. Appraisers compare your home to other properties from the same build period to gauge its value accurately.
4. Upgrades: Recent renovations and upgrades can increase a home’s value. High-quality materials and modern finishes are valued more than outdated or low-grade materials. However, over-improvement may not always yield a proportional increase in value.
5. Improvements: Additional features such as pools, garages, or casitas can add value to your home. Appraisers adjust for these improvements, even if they don’t change the home’s overall size.
6. Condition: The condition of the property plays a significant role in its appraisal. Well-maintained homes generally receive higher appraisals than those in poor condition. Appraisers assess factors like paint, roof age, and general upkeep.
7. Competition: The level of competition in the market can impact your home’s appraisal. Homes with multiple offers and competitive bidding are more likely to appraise higher compared to those that have been on the market for an extended period without offers or price adjustments.

Additional Considerations

While these factors are crucial, other aspects like interior design, landscaping, and market trends also play a role. Each appraiser may have a slightly different approach, leading to variations in appraisal values.

Why Understanding the Appraisal Process Matters

Understanding the home appraisal process helps you make informed decisions whether you are buying, selling, or refinancing a property. While the appraised value is important, remember that your personal preferences and needs are equally significant in determining the true value of a home to you.

For more information on buying or selling a home, or to start your home search, visit Harding AZ Real Estate. To start a conversation about your specific situation, call John Harding at 480-639-9640.

Happy home searching!