When buying or selling a home, a HOME APPRAISAL is a major part of the transaction. Whether you’re a buyer, seller or the owner, you should know how an appraisal impacts the value of your home. With that being said, we are going to discuss the importance of home appraisals at the time of HOMEBUYING.
SHORT NOTES :
* A report is prepared after visual inspection by a certified appraiser, and also depends on the rates of similar properties and market trends. This report is then used to determine the appraisal.
* A home appraisal is a fair and professional opinion of the true value of a home. It is used at the time of buying, selling or refinancing the property when a mortgage is involved.
* The buyer must pay an appraisal fee, which can cost as much as several hundred dollars.
* If the appraisal value of the home is lower than expected, the deal can be canceled.
WHAT IS A HOME APPRAISAL?
A home appraisal is a professional and unbiased view of the true value of a home. Home appraisals are very crucial at the time of buying, selling and most importantly refinancing the house. It determines whether or not the home’s features, conditions, and location are worth the contract price. When talking about refinancing, an appraisal ensures that the lender is not handing more than the home deserves.
HOW ARE HOME APPRAISAL VALUES DETERMINED?
A lender will want to order a home appraisal because it protects their interests. Also, the appraisal fee is paid by the borrower.
The value of a home appraisal is affected by factors such as current sales of similar properties and market values. Features of the home such as number of rooms, bathrooms, floor plans, etc. are the main factors used to calculate the home’s actual worth.
A qualified appraiser performs a visual inspection of the property thoroughly and creates a report that includes all the conditions that influence its value. It also mentions if the home needs any renovations or repairs. The appraiser creates a clear and detailed report about the property.
WHAT HOME APPRAISALS ARE IMPORTANT FOR A HOME BUYER?
An appraisal is the first step in the closing process when purchasing a home. If the value of the appraisal is approximately the same or above the contract price, the transaction will take place as planned. However, if the appraisal value is lower than the contract price, the transaction may get delayed or even cancelled.
An advantage for the buyer is that they can use a low appraisal as a negotiating tool to ask the seller to lower the property price. Also, it is important to note that lenders and banks will not lend any amount greater than the home’s actual worth.
If you are not convinced by a particular appraisal, you can request a different appraisal carried out by another professional.
We hope this helps. Good Luck!