What’s an appraisal? We’re glad you asked. Check out the top 10 things you need to know about an appraisal, then get started with the mortgage process here


1. What is an appraisal? 
An appraisal is a report made by a professional Appraiser setting forth an opinion of a property’s value. After examining your home, or the home you plan to purchase, the Appraiser evaluates local market data to objectively determine the home’s value.


2. Do I need one to obtain a loan?
Typically yes. And this is to ensure you’re getting a fair value for the property. There are a few Loan Products that may not require an appraisal, such as a HomePath® Mortgage or an FHA Streamline Refinance.


3. Will the appraiser come to the house?
Yes, the first step to an appraisal is called the “Inspection.” The appraiser will work with you, or the owners of the property you plan to purchase, to schedule a convenient appointment time.


4. What other factors are used to determine property value?
After inspecting your home in person, a certified, processional appraiser will carefully evaluate market data and look at similar homes in your area to compare recent property sales.


5.Will I have access to the final report?
Yes, you will be given a copy to keep for your records.


6.What if it comes in low? Can I challenge?
If the appraisal comes in lower than expected, it can cause some major restructuring to your loan and potentially increase the payments or require you to bring extra cash to closing. Both the borrower and the lender are prohibited from speaking to the appraiser, but if you feel there was something factually incorrect about your appraisal, tell your Mortgage Banker and he or she will pass the information along to the Appraisal Management Company (AMC).


When does the appraisal expire?
It depends on the type of loan you are qualifying for. Most are valid for 120 days. There are a few loan products that require an appraisal to be dated within 90 or 180 days of the closing date. Your Mortgage Banker can help you figure that out.


How much does it cost?
The cost of an appraisal varies based on location and property type. Generally speaking, an appraisal for a single family home starts around $250 and will go up from there based on a number of factors.


Is the cost refundable if my loan isn’t approved?
Unfortunately, no. The money paid for an appraisal is given to the appraisal company and they will not give refunds based on the outcome of the appraisal.


How is the appraiser selected?
By law, neither you nor Community Banks of Colorado can chose the appraiser. Federal law mandates that an individual or entity independent of the loan transaction, such as an AMC, must select the appraiser. Also, the appraisal must be completed by a third-party who has no interest in the outcome.