Can You Get an Appraisal Before Making an Offer?

A real estate appraisal is a professional, unbiased assessment of a property’s market value. It helps establish a fair price for a home, which is important for both buyers and lenders. Appraisals confirm the agreed-upon price aligns with the property’s actual worth, providing security for the financial investment.

Feasibility of Pre-Offer Appraisals

Obtaining a full appraisal before making an offer is technically possible, but it is not common. Appraisals are typically ordered by the mortgage lender after an offer has been accepted to ensure the property’s value supports the loan amount they are providing.

Pre-offer appraisals are rare for several reasons. One primary reason is the necessity of obtaining explicit permission from the seller to allow an appraiser access to the property. Without this permission, a comprehensive interior inspection, vital for an accurate appraisal, cannot be performed. Additionally, the potential buyer would bear the entire cost of this pre-offer appraisal, which usually ranges from $300 to $600 for a single-family home. This expense is incurred before any commitment from the seller, and the appraisal might not be accepted by a future lender. The time required for a pre-offer appraisal, typically ranging from several days to a few weeks, could also mean the property is under contract with another buyer before the appraisal is complete.

Understanding the Appraisal Process

A real estate appraisal provides an objective estimate of a property’s market value, which is distinct from a home inspection that focuses on defects. A licensed appraiser conducts this assessment by examining various factors that influence a home’s worth. This includes a physical inspection of the property’s interior and exterior, noting its overall condition, size, and features like the number of bedrooms and bathrooms, and any upgrades or improvements.

Appraisers also conduct market research, analyzing comparable properties (“comps”) that have recently sold in the same area. These comparable sales are typically homes of similar size, age, and condition, usually sold within the last six months. The appraiser considers the property’s location, neighborhood characteristics, and current market trends to determine the final appraised value. Appraisers adhere to strict guidelines, such as the Uniform Standards of Professional Appraisal Practice (USPAP), ensuring their reports are impartial and accurate.

Practicalities of Arranging a Pre-Offer Appraisal

If a potential buyer decides to pursue a pre-offer appraisal, the first and most important step is to secure explicit permission from the property seller and their real estate agent. This permission is necessary for the appraiser to gain access to the home for a comprehensive internal and external evaluation. Without seller consent, an appraiser can only perform a “drive-by” appraisal, which relies on exterior observations and public records, yielding a less precise valuation.

To find a qualified appraiser, one can search through directories provided by professional organizations like the Appraisal Institute or state licensing boards. It is important to confirm that the chosen appraiser is licensed and independent. The cost for a residential appraisal typically falls within a range of $300 to $600, though it can be higher for larger or more complex properties. The buyer is responsible for this fee. The entire process, from scheduling the appraiser to receiving the final report, generally takes between one and three weeks.

Integrating Appraisal Insights into Your Offer Strategy

Once a pre-offer appraisal report is obtained, its findings can significantly inform a buyer’s offer strategy. The determined appraisal value provides objective data that can directly guide the offer price a buyer decides to make on the property. This objective assessment helps ensure the proposed purchase price aligns with the home’s market worth.

Should the appraisal value come in lower than the seller’s asking price, this report can serve as a data point for negotiation. It provides a factual basis to discuss a reduced purchase price with the seller, potentially saving the buyer thousands of dollars. Having a pre-offer appraisal offers a buyer confidence in their financial decision, as they are making an offer based on an independent valuation rather than solely on the listing price. The appraisal, while valuable, remains one piece of information to consider alongside other market conditions and personal financial goals.