Days or weeks before your mortgage
application is approved, the lender will order a professional appraisal of the
home to make sure that the contract price is in-line with the current market
value of the home. The appraiser's fee and technique will be based on the complexity of the
appraisal and the time required.
A professional appraiser will choose the
appraisal technique that is applicable to the subject property to arrive at
an objective opinion of the value. One technique is to look at comparable homes
in the area that have sold for a similar price within the last six months.
The price of each comparable home is adjusted to reflect the differences between
it and the subject property. If there are a number of similar properties
that have sold recently, the appraiser's job is relatively easy. It is more complicated to
arrive at the appraised value if your home is located in a rural area or a
unique neighborhood. The appraised value will typically be very close to the sale
price. If the appraisal comes in lower, the real estate agent or Realtor may be able to provide the
appraiser with additional info on recent sales which will result in an
increased valuation
