Most individuals looking to buy and sell homes already understand what a real estate appraisal is, at least in general terms. Less understood are the finer points involved in that appraisal, from hiring the appraiser to reading the report he or she issues. Remember, the reason for the appraisal in the first place is to establish a fair market value so that all parties are negotiating from the same place.

The first thing to realize about a real estate appraisal is that it is not a home inspection. Home inspectors look at a home's overall infrastructural health, from the upkeep of its heating and cooling systems to the condition of roofs, foundations, insulation, and so forth. The two are certainly related but are performed by different sorts of professionals. In many cases, both an inspector and an appraiser will be needed.

Your Real Estate Appraisal Report

The findings made by your appraiser are collected in a report that lays out the data in the most clear and intelligible way. This same report must ascertain a credible value for the property in question as well as identify the purpose of the report and for whom it was generated. In the majority of instances, it is the lender who requests (or demands) an appraisal, even if it's the borrower who ends up paying for it.

Most frequently, your real estate appraisal is included as part of your closing costs, meaning you pay for it once escrow closes. One of the strange particulars of appraisals is that they are available to the buyer, but only through the lender, not the appraiser him or herself. Legally, it is the lender who owns the report and is thus entitled to do with its information whatever he or she pleases.