Your home is an investment; know its value–and your rights. Be an informed homebuyer!
The appraiser is the independent, impartial, and objective professional in the mortgage transaction. An appraiser develops an appraisal, which is a credible, reliable, and supported opinion of value. An appraisal is typically used by the lender in a home purchase transaction. It assists in the lender’s decision to provide funds for a mortgage. While the lender is technically the owner of the appraisal, as a borrower you still have certain rights:
- You have the right to obtain your own appraisal, even if you are paying cash for a property.
- You have the right to know what type of valuation service is being ordered for your loan.
- You have a right to make an appraisal a contingency in your sales agreement.
A home purchase is typically a person’s largest financial instrument. Protect yourself by getting your investment appraised! The appraiser will observe the property, analyze the data, and report their findings to their client. The client may be the lender, borrower, or other third party.
An appraisal ordered by a lender is for the benefit of the lender to ensure that the collateral they are using to securitize the loan is sufficient. An appraisal is not a home inspection. While all appraisals are valuation services, not all valuation services are appraisals.
There are a number of products that appraisers, real estate brokers, or other entities prepare, which vary in levels of analysis, detail, and reliability. From most comprehensive to least comprehensive, they are: