Appraisal


		Estimating a home's fair price. Before a lender will approve your loan, the loan officer will hire (and you will pay for) an appraiser to determine the quality of the property and its fair market value—a price range a given property will bring, assuming neither buyer nor seller is under any extreme pressure to buy or sell. The appraisal should come in the same or higher than the price you are paying, because the lender won't lend you more money than the home is worth. Lenders usually choose appraisers from a list of certified or licensed individuals connected with organizations like Appraisal Institute or National Association of Independent Fee Appraisers. The appraiser evaluates a home using three methods: Comparative market analysis, which the appraiser uses to find a typical selling price of a comparable home, not necessarily the highest priced home in the area Interviews with real estate agents and the appropriate government real estate tax personnel Touring the property, taking into account the square footage, floor plan, number of rooms and baths, upgrades, overall condition of the home and the neighborhood Keep in mind: • Although you pay the appraisal fee, the appraiser works for the lender, which uses an appraisal as a final qualifier for finalizing the loan. • If you question the results, you may want to engage your own appraiser for a second opinion. • Appraisers often work on a tight deadline, right before closing. If the appraisal comes in lower than the selling price, it could throw a monkey wrench into your loan approval process.