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Do you have to get a home appraisal if the seller already has one?

Sammamish Mortgage
Published:
January 22, 2021
Last updated:
February 26, 2021
Overview of Home Appraisals for Borrowers

There are many steps that are involved in the home buying process, and getting an appraisal is one of them. If, in the rare instance, the seller has already obtained an appraisal, you may be wondering if you need to get one as the future owner of said home. Well, the truth is you should always get your own appraisal, and likely your lender will require you to get one regardless of whether or not the seller already has one.

In This Article

Generally, a home buyer or borrower is required by their lender to get a home appraisal. But be that as it may, there is an instance where you can opt to skip the home appraisal altogether. In the event that the added cost of an assessment is too much for the buyer and the home is selling for $400,000 or less, then an appraisal is often not required. That said, getting a home appraisal nevertheless is in a homebuyer’s or borrower’s best interest, and rarely is it waivable.

Why, If The Seller Has An Appraisal Done, Does A Potential Home Buyer Have To Get A Home Appraisal?

If the seller has taken the liberty of getting their own appraisal, you should not take it at face value as your lender definitely will not. The truth is that the only appraisal that matters is the one that is accepted by the buyer’s lender. Thus, in order to understand the importance of getting your own appraisal as a potential home buyer or borrower, here is a brief overview of home appraisals.

What Is A Home Appraisal, and How Long Is One Good For?

An appraisal is an unbiased professional opinion or assessment of a home’s value. Typically, appraisals are used in purchase-and-sale and refinance transactions. If you are looking to purchase a home, then the appraisal is used to determine whether the home’s contract price is appropriate, given its condition, location, and features. In contrast, if you are refinancing, then the appraisal provides the lender with an accurate picture of what your home is worth to ensure that the lender is not giving you more money than necessary (over-borrowing).

Usually, an appraisal is good for approximately 90 days. However, appraisals technically do not expire, and most appraisals will be accepted for 90 days or up to six months in some cases. Moreover, different loan types have different validity periods. The good news here is most appraisals can be updated/recertified in order to avoid the need for a new appraisal if the validity time frame has lapsed. That said, it is important to note that ever changing market conditions may very well reduce the validity time frame to 30 days. Therefore, once your appraisal is done, you should get the ball rolling on the next steps of the home buying process as soon as possible.

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Who Is Responsible For Ordering and Paying For The Appraisal?

Your lender orders the appraisal to be performed by a licensed appraiser. However, you, the borrower, are typically required to pay the appraisal fee, which can be several hundred dollars. The cost appears on the Closing Disclosure as part of your closing costs.

What Does A Standard Appraisal Include?

A qualified appraiser will create a report that is based on his or her visual inspection of said home, using recent sales of similar properties, current market trends, and aspects of the house to determine its appraisal value.

An Appraisal report or package as it is sometimes referred to includes the following items, in accordance with the Nations Association of Realtors (NAR):

  • Plats Detailed maps of the nearby neighborhood
  • Neighborhood Details
  • Surveys, Deeds, and Covenants
  • Floor plans, HOA documents, and Specifications
  • A detailed list of upgrades, remodels, and costs
  • Inspection reports
  • Energy-efficient green features
  • Recent similar-quality comparable
  • Sales contract

How Are An Appraisal and An Inspection Different?

The major difference between the two is that an appraiser does not look for potential defects in the home, as this is the responsibility of the home inspector. It is time to hire an inspector when you are purchasing a home. At this time, an inspector will provide you with an itemized report of potential repairs or problems with the property. On the other hand, an appraiser focuses on whether the home’s agreed-upon purchase price is in line with what the house is actually worth.

A Crucial Part of the Home Buying Process

Thus, as you can see, an appraisal is an important part of the home buying process, and if everything goes as planned, the home appraisal will likely be just another box to check on your closing checklist. The only issue that could arise with your home appraisal value is if the home’s value is lower than expected. In this instance, the transaction can be delayed or even canceled. So, a home appraisal is not something you should take lightly or leave up to the seller.

Ultimately, regardless of whether you are purchasing, selling, or refinancing a home, a basic understanding of how the appraisal process functions is a must, especially if you are buying your first home. Thus, if you need assistance or more information regarding this step of the home buying process, then do not hesitate to reach out to a knowledgeable lender in your area.

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If you need the assistance of a seasoned mortgage professional, Sammamish Mortgage can help. We are a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.

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