Whether you’re buying a house on a mortgage, selling it, or you’re applying for refinancing, a home appraisal is an important segment of these processes that shouldn’t be skipped. For home buyers interested in California real estate, a home appraisal helps to determine a home’s final selling price based on its visual structural integrity.
This guide on the home appraisal will answer your basic questions on the process:
Q: Isn’t a home appraisal the same as a home inspection?
A: No. They’re similar in the sense that both look into the various defects and flaws of a house but the similarity ends there. An appraiser will make a visual scan of the home to check for these anomalies and, based on their findings, they will assign an overall value to the home. An inspector, meanwhile, delves more thoroughly into finding structural defects. These include flaws not seen by the naked eye. All of their findings are reported in an evaluation submitted to the home buyer.
Q: How much does a home appraisal cost in California?
A: Around $300 to $500 for a single-family home. For multi-family units, the base cost is around $600. The home’s size, location, type, and other factors will come into play in determining the final cost of this service.
Q: Who pays for the home appraisal: the buyer or the seller?
A: In most cases, it’s the buyer. After all, their lender will require this information to determine the monthly payment rate. But during negotiations, there are instances when the task of shouldering payment is placed on the seller.
Q: What happens during the process of an appraisal?
A: It’s important to know that the home appraisal forms part of a real estate transaction’s final leg — the closing. By this time, negotiations between parties of the buyer and seller are almost done and a contract is now being drafted.
With the knowledge of the lender, the buyer will employ the services of a home appraiser. Once the price and other formalities have been agreed upon and signed, the appraiser will proceed with his work.
The appraiser will look at the following aspects of a home in determining its overall value:
- The home’s basic condition and adherence to health and safety regulations. They will see if the home being appraised is livable or not.
- Upgrades. They will check if these add value to the home.
- Comps. It’s not enough that an appraiser simply assesses a home on its own. They will also look at recently sold homes within the vicinity that are similar to the seller’s and check the selling prices of these homes.
Findings and the home value based on the above-mentioned elements will be put together in a report to be submitted by the appraiser to the buyer’s lender.
Q: What if the final price determined by the appraiser is lower than the price set by the seller?
A: Then another round of negotiations may commence, hence, delaying the closing. But this time around, the buyer has more leverage to negotiate for a lower price.
For more advice on home appraisal and other tips to guide you in your home search, talk to one of the most trusted and knowledgeable Realtors in the communities of La Cañada Flintridge, Pasadena, Glendale, La Crescenta, or Altadena — Kathy Seuylemezian. My team and I are here to help. Contact us today at 818.949.5205 or email me at kathy(at)imuragent(dotted)com.