What You Need To Know About Who Can Order A Home Appraisal
Understand Who Can Order A Home Appraisal Before You Waste Your Money
Can anyone order a home appraisal?
But the reality is – it depends on what the appraisal is to be used for.
What Is a Home Appraisal?
A home appraisal is an estimate of the home’s value prepared by a licensed appraiser.
Location, amenities, structural condition and recent sales of similar properties are important factors.
A home appraiser conducts the process. The appraiser will walk-through the property, noting things effecting the home’s value.
For example, having a swimming pool when other homes in the area don’t might reduce the value. An upgraded kitchen where other local area homes don’t will likely add value.
Who Performs Home Appraisals?
Appraisers perform the home appraisal. Appraisers are third-party certified or licensed contractors. Their training and licensing process includes considerations effecting home values. Considerations include neighborhood growth, local housing trends and market conditions.
So, appraisers do the home appraisal, but who can order the home appraisal? It depends on what the appraisal is for!
Mortgages and Refinancing
It almost impossible for a home owner to order a home appraisal for a mortgage or refinancing. Regulations enacted in January 2014 changed the rules.
So who orders the home appraisal? The Lender!
The lender contacts an appraisal company who then assigns an appraiser to do the work. When completed, the appraiser sends their appraisal report to the lender.
The lender is not involved in the real estate appraisal in anyway. They order the appraisal, they get the report. The residential appraisal and the lenders mortgage/refinancing process determine who gets financing.
Selling A Home
When a person sells their home, their Realtor will prepare a Comparative Market Analysis. The “CMA” helps the Seller understand their local housing market and their homes value.
In some housing markets, the Seller may also want a pre-listing or marketing appraisal. The pre-listing appraisal will to determine a listing price for the home.
Since the Seller is using the home appraisal for their own use, the Seller can order the appraisal. The Seller, or their Realtor, will call an Appraisal Company. An appraiser will do the appraisal. The seller pays for and receives the residential appraisal report.
Other Home Appraisal Uses
Other situations in which the “interested party” can order a home appraisal include:
- To protest a Tax Assessment
- For Estate Planning
- For a Divorce Settlement (by one of the attorneys)
- Before putting a property for sale as a FSBO (For Sale By Owner)
- Before purchasing property with cash
- Before buying a FBSO with owner financing
The housing market crisis brought about changes to the real estate appraisal process. To ensure an “unbiased” appraisal, the answer to who can order a home appraisal changed.
Should the wrong person order a real estate appraisal, the appraisal report may not be useful.
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