This has something that has always escaped me but intrigued me at the same time. So I know if I’m wondering about how the process works, I bet there are those of you out there reading this wondering the same thing!
It doesn’t matter if you are buying or selling a home. Getting a home appraisal is an important step during this process. As a buyer, a key part of a mortgage is by getting a mortgage appraisal sorted to confirm the sales price for the lender. An appraisal is a licensed or certified professional’s opinion of a home’s value provided by a disinterested third party.
It’s important to get an appraisal of your home’s value. It doesn’t matter if you’re buying a home using a mortgage, refinancing your existing mortgage, or selling your home to anyone other than a cash-buyer. If you don’t sort out a home appraisal then this can’t happen, as a home appraisal is a key component of this transaction. Whether you’re a buyer, owner or seller, you need to make sure you understand what a home appraisal is and how it works.
How the Appraisal Process Works
The way an appraisal works is that an appraiser will come into your home and do a physical inspection. They will need to see every room in the house. If you are interested in getting a high appraisal then consider freshening up your home’s paint job, clearing away clutter and making sure you point out any hidden features that will help increase the value.
During the inspection, the appraiser will be looking at the structure, condition, important features of your home, plus a whole lot more. They will take measurements of the property or they will look at previous appraisals of the home before you moved into it. All of this data will then be collected, and it will be compared to other home values in your area. This will help the appraiser come to a decision about what the appraised value of your home is. Please note though, that this is the assumed value of your home and not what it will sell for.
Why do Lenders Want an Appraisal?
The reason why lenders want appraisals is that they offer an unbiased, professional estimate of the house’s value for sale. Lenders want to protect their investment, so they always want to get an appraisal before they offer a mortgage. If the market value of the property is lower than the sales price and if the buyer defaults on the mortgage, then the lender won’t be able to cover the costs.
This is why it is so important to the lenders, to make sure that they are covered if an issue occurs in the future. Lenders also want to make sure that homeowners are not over-borrowing for a property because the home serves as collateral for the mortgage. The appraisal is a key component of the home buying process, for both you and the lender. The bank will want to know that the financing they offer you can be supported by the collateral and you will want to make sure that you are not paying more than the house is worth.
What to Do if you Get a Low Appraisal?
Getting a low appraisal can be a frustrating thing, as it can slow or even cancel a sale. The reason behind this is because buyers and lenders don’t want to have to overpay for a house. If the house appraises for less than the agreed-upon sale price, the lender won’t approve the loan. In this situation, the buyer and seller will need to come to a mutually beneficial solution that will hold the deal together.
If you think that the appraisal is too low and that you deserve better, you can always request a new appraisal and can challenge the home appraisal with a reconsideration of value. If you are unhappy with your home appraisal, then you can easily find out what comparable sales were used, and you can ask your agent if they’re appropriate. Your agent should be more familiar with this than your appraiser, and you might be able to get a higher valuation if you are lucky enough. If you are looking to sell your house quickly, then you should check out this article here.
Have a Great Week!
Disclosure: This post MAY contain affiliate links and I may receive compensation if you make a purchase after clicking on any of my links. For more information about FTC disclosure requirements, please see here.