When your offer to buy a home is accepted, it can feel like the end of a long journey. But it’s more like the middle. There are still a few more i’s to dot and t’s to cross before you get the keys to your new home.
Unless you made an all-cash offer, a home appraisal, also known as a property inspection, is often — though not always — part of the process. Here are some answers to common questions we get about home appraisals and when you might be able to skip one.
Why do lenders require appraisals?
An appraisal is an estimate of the market value of a property based on multiple factors, including the square footage, condition, and features of a house and the sale price of comparable homes in the area. Lenders typically require a home appraisal as a condition of a mortgage to ensure they are not lending more than the home is worth.
Who orders the home appraisal?
While HFG orders the home appraisal, a third-party appraisal management company conducts the appraisal. We place the order, and the management company assigns an appraiser to inspect the home. The appraisal company works with the seller of the home to schedule a convenient time for the inspection. If you have a short closing timeline, we may be able to work with the company to expedite the process for an additional fee.
What is a property inspection waiver (PIW)?
In certain situations, when the borrower is eligible, the lender may not require an appraisal to close the loan. This is known as a property inspection waiver or PIW. When it’s eliminated from the process, you can save time and money. But if you don’t qualify for a waiver, signing your loan disclosures as soon as you receive them can help prevent delays and keep settlement on schedule.
How do I know if I’m eligible for a PIW?
If we could provide you with a list of eligibility requirements for obtaining an appraisal waiver, we would. But it’s not that simple. Because every transaction is unique, the only way to know for sure if you qualify for a waiver is to go through the underwriting process for a specific property.
When you’ve provided us with the necessary financial information we need to complete your loan application and the address of the property you’re interested in buying, we can let you know if you qualify.
If you’re ready to complete a loan application to purchase your next house, simply reach out and we are happy to review your options with you.