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If you own a home and are thinking about getting a home appraisal to see what it is worth, there are a few things you should know. First of all, the home appraisal belongs to whoever pays for the appraisal and cannot necessarily be transferred to a new buyer to obtain a loan. The reason for this is that the appraiser is “hired” by whoever pays them, whether it is the seller, the lender or the new buyer.

Appraisers are bound by certain ethics and can look at appraisals from a number of ways. All methods take the comparable sales into account, but usually those that occurred within a few miles of the home and occurred in the past six months or less are all that can be considered. That means an appraisal can change in a short amount of time based on the homes that have most recently sold.

Another thing that appraisers look at is replacement cost, in other words, the price of lumber and construction costs in a particular area and then the home’s depreciated value might be considered when it comes to the comparable sales. If your roof is older, or you are lacking a garage, there are certain amounts that would be subtracted, for example.

The amount it would take to replace the home needs to be considered and if it is an income property, like a rental house, then the income approach is important. Even on homes that are not for rental purposes, this approach can be considered. The appraiser will then add the three methods together and divide by three to come up with an average appraisal cost.

Sometimes, the appraisal for your home might be improved by the condition, which you have some control over. If everything is freshly painted and in good condition, the appraiser is likely to have a good opinion of the condition of your home and less likely to make subtractions for poor condition, which will add some value to the home. They are likely to ask about any recent improvements you have made to the home since the last appraisal.

In addition, they are likely to take pictures, measure and ask questions. If you have a copy of the last appraisal on your home, it can sometimes be helpful and save time. Sometimes, the purpose of the appraisal can have a slight impact on the value, especially if you are refinancing your loan.

You have to consider that the comparable sales can change daily, so in a declining area, the appraisal price can drop quickly, even if it has only been a few months since you had an appraisal done. Many times the reason your real estate agent will use comparative market analysis to come up with an asking price for your home is that comparable sales are what an appraiser will use to determine the value of your home.

An appraisal is important through the entire process of the home sale and can determine what a lender is willing to loan on your home. You want to make sure that it is in good condition and everything is in good order for the best appraisal value.

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If you are thinking about selling your home or refinancing, you know you will eventually face an appraisal. There are ways to estimate your home’s worth based on some of the same things a realtor will consider when listing it. There are some real estate websites that will let you look at homes listed in your neighborhood and ones that have recently sold. This can be helpful in estimating what your home will be worth, but you won’t know for sure until an appraisal actually happens.

The problem with selling or re-financing your home is that most people aren’t prepared for an appraisal that doesn’t come out. Appraisers are under more scrutiny than ever before and they are looking closely at comparable properties in the recent marketplace, regardless of what homes were worth six months ago. In fact, even if you had an appraisal done six months ago, most lenders won’t accept them for re-financing or when you sell your home. You will be faced with a new appraisal that will determine what your home is actually worth.

There are a few tips you can use to come up with an estimated appraisal value. If you look at home sales that took place in your neighborhood and divide the sale price by the square footage of the house, you can get a general price per square foot, which can help you estimate the value, based on everything else being equal. If you have an extra bedroom, your house will have additional value and an additional bathroom can make a difference, too.

Another thing to consider is the condition of your roof, interior, and other components because appraisers will subtract value for sub-par components, or those that are going to need replaced. A good rule of thumb is to know the marketplace in your neighborhood or houses for sale and those that have recently sold to see how you compare. Chances are, if there is a home listed that is bigger than yours and in better condition, it will become part of the comparable sales when it comes time for your appraisal, whether for re-financing or listing your home for sale.

Many homeowners think that an appraiser will consider what you owe and then decide how much more you should get. The fact is that the appraisal doesn’t consider what your mortgage balance is and you can end up disappointed when you find out your home is worth less than is owed, causing you to be out of equity or upside-down in the house. Homeowners that are used to the appreciation of recent years might be disappointed to find out their home has lost that appreciation when it comes appraisal time.

Much like trading in your car, there is a possibility that you will be upside down and left with no choice but to short sale the home, or come up with the extra owed at closing to pay off the loan. The only other alternative is to wait out the current market in hopes that home values and appraisals will start to go up again.