You’ve found the perfect home, but the appraisal indicates the home is worth less than the seller’s asking price. Will INB lend you what the seller is asking? No . . . and neither will any other reputable lender.

A home appraisal is one of the most important pieces of the home buying process. It assures both the buyer and lender that they’re getting what they’re paying for. Because a home’s value can change, a new appraisal is usually required when you refinance your mortgage.

So what are the key things the appraiser looks for?

1. The appraiser will look at other properties in the area and see what they’re selling for. He or she will look for something with comparable lot size, square footage of finished and unfinished space, style and age, as well as other features such as garages and fireplaces. Recent trends of comparable properties in similar neighborhoods could affect the value of a home, so some appraisers may reach beyond the appraised home’s neighborhood.
2. The appraiser will evaluate the size and condition of the house and other permanent structures. He or she will describe any improvements made to the house and what materials were used.
3. The appraiser may note structural problems, such as wet basements and cracked foundations. While the appraiser should highlight these obvious issues, he or she does not inspect the home to assure it is up to code. You’ll need to hire a home inspector for that.
4. The appraisal will include notes about the neighborhood and surrounding developments or acreage. For example, if a new school or night club is being built across the street, there is potential it will affect the value of the home.
5. The appraiser will also consider the condition of the exterior of the property. Are the shrubs well-kept and the sidewalks free of debris? If not, the appraisal could reflect a lower value.

The final appraisal amount will include the value of the home, any permanent structures on the property, and the land the house is built on.

While home appraisals are required for a home mortgage, home buyers typically pay for the appraisal. Contact any INB Mortgage Loan Officer for details at 1-877-771-2316.