While an appraiser is typically never seen by a new homebuyer, an appraisal is obviously an important component in the home purchase process and will always be required by your bank in order to obtain a loan.

And, neither you, nor your lender has the flexibility of deciding which appraiser will inspect your home. Appraisers hired for a mortgage transaction are chosen from a computerized pool of Texas Certified Residential Home appraisers in your area at random. This recent change was brought on with the Home Valuation Code of Conduct HVCC, and is effective with loans originated on or after May 1, 2009.

Once selected, your appraiser will be notified to conduct an analysis of the property and determine the current market value. Appraisers compare the sales prices of similar properties sold in the neighborhood and surrounding areas near the subject property.

A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection. However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property.

The appraisal can be a slightly more complicated process if there are few properties to choose from, or if there is an overwhelming amount of foreclosures and short sale listings, but the premise is the same.

When done, the estimate of value is given. If that value is below the purchase price, then it’s back to the negotiation table with the seller. But, if it is above the purchase price, you are ready to move forward with closing!