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Understanding the home appraisal process

On Behalf of | Jun 28, 2022 | Residential Real Estate

First-time homebuyers are often prepared for the first few steps of buying a home: looking at properties, making an offer and even a home inspection. But one step that Massachusetts home buyers may overlook is the home appraisal. Here is some information about what a home appraisal is, how long it takes and what it entails.

What is a home appraisal?

A home appraisal is a valuation process. Mortgage lenders often complete an appraisal prior to finalizing the amount they are willing to lend towards a property. This is because they want to ensure the amount they are lending aligns with the true value of the home. The appraisal can also benefit the buyer, as it will help to ensure the price ultimately paid is fair market value.

How long is the home appraisal process?

The first step in an appraisal is the inspection. This can take between less than one hour to two or even three hours, depending on the size of the home. Following the inspection, the appraiser will do additional research, such as looking at comparable properties in the area. Finally, they must put their findings in a report. This can take anywhere from a few days to a few weeks, depending on the appraiser’s workload and the complexity of the appraisal.

What are some of the possible outcomes of an appraisal?

Ultimately, there are three possible outcomes: the appraisal comes in at less than the agreed upon price, it comes in at more than the agreed upon price, or it matches the agreed upon price. If it is below the price that was agreed upon, a buyer may need to make up the difference as the lender will be limited in how much it can pay toward the property. Buyers who do not have the funds to do this may want to include for an appraisal contingency in their offer.

Appraisals are just one of the many steps in buying a house which individuals may overlook, especially if they are first-time buyers. There are also many other small steps, including legal due diligence, that need to be considered. To understand all the legal steps and move forward with a home purchase, Massachusetts buyers should contact an experienced real estate lawyer.