Real Estate Appraisal Explanation | Quicken Loans Education
So what’s an appraisal anyway? An appraisal is what determines the fair market value of your property. The appraisal is performed by a licensed appraiser who provides a professional opinion of the value of your property based on a variety of factors. Its an important part of the mortgage process that needs to happen before the transaction can be finalized.
The real estate inspection will take anywhere from 10 to 30 minutes based on the size of your home. The appraiser will record things like square footage, the dimensions of your property and the number of rooms in your home. He’ll verify his findings with information provided by third parties such as the real estate multiple listing service and county records.
The next step is for the appraiser to evaluate Comparables. Comparables are recent home sales in and around your neighborhood. Analyzing these recent past sales helps an appraiser determine the current market value of your home. And when I say recent, I’m talking 3 to 6 months.
You should also know that home values from Real Estate websites do not give you accurate comparable values. The information they provide may be outdated and isn’t verified by third parties such as real estate multiple listing services.
Here’s a question a lot of people are asking these days: Will a foreclosed house in my neighborhood affect the appraised value of my property? The answer is that it depends on the amount of foreclosed properties that have sold in your area.
And the more foreclosures in your area, the more average home prices will fall.
The important thing to remember is that appraisers can’t treat foreclosure sales any different than non-foreclosure sales. A sale is a sale regardless of whether a comparable property happens to be in foreclosure. But here’s the good news: By keeping your property well-maintained and up-to-date, you’re doing what you can to increase the appraised value of your property.
Next, an appraiser will move on to the final step: Preparing a Final Report of Value. This report will detail the appraiser’s analysis of the value of your property based on a combination of the inspection and the comparables. Also, if you’ve done home improvements and upgrades to your property, the appraiser may take these into consideration when writing his final report of value. Both you and your mortgage lender will get a copy of this report.
Appraisals can only be performed by a state-licensed third party. That means that by law, we have no influence on the appraised value of your property.
In fact, if an appraisal on a property comes in too low, we won’t be able to write a loan on it. The bottom line is that we at Quicken Loans want what you want: A fair appraisal of your property that accurately reflects todays market conditions.
\Quicken Loans is an Equal Housing Lender. Quicken Loans Inc. is a licensed mortgage lender in all 50 states. Arizona: Quicken Loans Inc., 16425 North Pima, Suite 200, Scottsdale, AZ 85260, Mortgage Banker License #BK-0902939; Arkansas: Quicken Loans Inc., 1050 Woodward Avenue, Detroit MI 48226-1906, (888) 474-0404; California: Licensed by Department of Corporations, CA Residential Mortgage Lending Act; Colorado: Quicken Loans Inc., NMLS #3030, (888) 474-0404, Regulated by the Division of Real Estate; Georgia: Residential Mortgage Licensee (#11704) — 1050 Woodward Avenue, Detroit MI 48226-1906; Illinois: Residential Mortgage Licensee #4127 — Department of Financial and Professional Regulation, 1050 Woodward Avenue, Detroit, MI 48226-1906; Maine: Quicken Loans Inc., Supervised Lender License NMLS #3030; Massachusetts: Quicken Loans Inc., Mortgage Lender License #ML-3030; Minnesota: not an offer for a rate lock agreement; Mississippi: Licensed by the Mississippi Department of Banking and Consumer Finance; New Hampshire: Licensed by the NH Banking Department, #6743MB; New Jersey: Licensed Mortgage Banker — NJ Department of Banking, first (and/or second) mortgages only; New York: Licensed Mortgage Banker — NYS Banking Department; Oregon: Quicken Loans Inc. — License # ML-1387; Pennsylvania: Licensed as a first Mortgage Banker by the Department of Banking and licensed pursuant to the Pennsylvania Secondary Mortgage Loan Act; Rhode Island: Licensed Lender; Texas: Quicken Loans Inc., 1050 Woodward Ave, Detroit, MI 48226; Virginia: Quicken Loans Inc., NMLS ID #3030 (www.nmlsconsumeraccess.org). Washington — Consumer Loan Company License CL-3030. Quicken Loans Nationwide Mortgage Licensing System #3030.
© 2013 Quicken Loans Inc., All rights reserved. Lending services provided by Quicken Loans Inc., a subsidiary of Rock Holdings Inc. “Quicken Loans” is a registered service mark of Intuit Inc., used under license.