What Buyers And Sellers Must Know About Home Appraisal
Home appraisal is the last thing anyone thinks of when buying or selling a house. While appraisals are not the most glamorous part of buying or selling it is one of the most important.
Below is a must know about home appraisals for buyers and sellers:
What are home appraisals?
Home appraisals are important because it is a professional estimate of how much a house is worth. It is also important because no credible lending organization will lend you money without an appraisal. A home appraisal will tell a bank or lender how much the property will sell in case of a worse-case scenario. In short, the bank does not want to be stuck with a $1 million loan on a property that will only sell for $100,000 because that’s all it’s worth.
It’s a Snapshot
Home values change and as prices shift, you can consider your home appraisal as a snapshot. For example, your home was appraised at $150,000 this week. But two months from now when you refinance it, the appraised amount could be higher or lower depending on how your market is performing.
How is it different from a home inspection?
Both terms can be confusing and an appraiser and inspector will usually walk around the house to take a good look. However, they both have different roles. The appraiser looks for the value of the property while the inspector is looks for defects. In some situations an appraiser may also request for a home inspection if they notice a defect in a house, for example, damp carpet in the basement.
How Do They Estimate The House Value?
There are many different factors that can affect how much your house is worth. Home appraisers usually look for square footage, condition of the house, number of bedrooms and bathrooms. The appraiser will then compare the house to other recently sold similar properties in the neighborhood.
Who Pays For It?
The seller is usually the one who pays for home appraisals at closing. Fees can cost up to $400. According to HomeAdvisor.com, the national average price for home appraisals is $327. It used to take a couple of days but due to changes in federal guidelines, home appraisals usually take a week or two.
Second Opinion
If you think or feel that the appraised value of your house is too low you can ask for a second opinion. You can request for a second appraisal by a different appraiser. On the other hand, it could be a sign that the appraisal is accurate so you will have to adjust your pricing or the loan you are refinancing.
When you’re buying or selling a house, an appraisal is one of the steps you have to take. Therefore it is important to understand how the appraisal process works and what it could mean for your property. Looking for more information on how much your house is worth? Learn more here.