A Guide to How a Home Appraisal Works

When purchasing a new home in Homewood or Albertville, lenders must schedule an appraisal before borrowers obtain a mortgage. This unbiased assessment of a home’s value is instrumental in the purchase process. Homebuyers should understand how this process works and how the appraiser determines the value of a home. Due to the appraiser’s expertise, appraisals are highly accurate and provide vital information for the lender.

What Is Involved in the Appraisal of a Home?

The primary purpose of a home appraisal is to determine if a property’s contract price is accurate. The appraiser assesses the home’s condition, features, and location to determine the value.

Lenders often require an appraisal before they will lend money to a borrower. The lender needs to be sure the price of the home is accurate because it serves as collateral for the mortgage. Lenders must know they can recoup the money loaned to the borrower by selling the property if the borrower defaults on their loan.

Understanding the Appraisal Process

The lender typically orders the appraisal because it protects their interests. The borrower handles the cost of the appraisal fee. In most cases, appraisers use the Uniform Residential Appraisal Report. Lenders ask the appraiser to provide detailed information regarding their analysis of the home. Information provided in the report includes the following:

Exterior Building Sketch

The appraiser must draw a building sketch that includes a rough outline of the exterior of the home.


Street Map

Appraisers must attach a street map that includes information on comparable sales data and the property.


An appraisal report will include photographs taken of the home from multiple angles. The appraiser documents the front, sides, and rear of the home in photographs.

Square Footage

Appraisal reports include detailed information on how the appraiser determined the value of the property.

Pertinent Facts

The appraiser must include highly detailed facts in their report. The report will include data on the location’s sales market. Appraisers also provide data on public land records and any available tax records. The report must include any information that was used by the appraiser to place an ultimate value on the home. Detailed appraisal reports are used by lenders to calculate the amount offered for the mortgage.

The experience level of the appraiser ensures they expertly draft the report. The full inspection and report will typically take two days to a week to complete. Once this is finished, the process of offering a mortgage to the borrower will commence.

First Lenders Wants Buyers to Be Prepared

Understanding the appraisal process is important for homebuyers. First Lenders, founded in 1988, focuses on helping homebuyers realize their dreams of homeownership. With locations in Albertville and Homewood, Alabama, they provide the service buyers need so they can feel confident buying a home.

First Lenders offers extensive support to borrowers throughout the home buying process. Those who are ready to purchase a new home should contact First Lenders in Homewood or Albertville right away. They will be happy to help you get started on the process towards homeownership.

For more information please contact us today.