If you're a prospective homebuyer, you may wonder what a real estate appraisal is and why it's necessary. An appraisal is an unbiased estimate of what your property is worth in today's market, and you'll need one if you're buying or selling. Here's a closer look at what a real estate appraisal really is and why it matters to you.
What Is a Real Estate Appraisal?
A real estate appraisal is an unbiased estimate of the value of a property. In other words, an appraisal lets buyers know how much the home is worth.
Who Performs an Appraisal?
A real estate appraisal is performed by an independent, certified appraiser. This person is typically hired and paid for by the mortgage lender or bank, as they will use the appraisal to determine whether or not to finance the sale. The appraiser will inspect the property inside and out, taking note of all important features and looking at any amenities that may affect the home's sale price.
What Factors Are Considered During an Appraisal?
A real estate appraisal considers many factors before arriving at a value, including:
All these factors combined can help determine whether or not this particular property is worth what the buyer is offering to pay.
What Happens if a House Does Not Appraise?
Sometimes a house will appraise for less than what the buy initially offered to pay for it. Buyers have a few options at this point. First, they can make up the difference in cash. In other words, their bank will only allow them to borrow a percentage of the home's value. They will have to pay for any shortcomings out-of-pocket. They can also walk away from the sale or re-negotiate the price with the sellers, all without penalty.
Who Pays for the Appraisal?
The bank initially pays for the real estate appraisal when you are purchasing a house with financing because they want to make sure they are not overpaying for a property. However, the cost of the appraisal is a line item on the buyer's side of the HUD-1 statement, the final document at the closing that states the sales price, all expenses related to the sale, and who pays for which fees.
Real estate appraisals are important because they provide banks with assurance that they are not overpaying for a property when providing financing to buyers. Likewise, appraisals also give buyers peace of mind that they are paying a fair market price for their new home. By understanding how an appraisal works and what factors play into determining its value, prospective homebuyers can feel confident in their final decision-making process.
Contact a local certified real estate appraiser to learn more.
Share12 January 2023
Do you absolutely adore your home, but are planning an upcoming move due to a career change? If you’re moving in the near future, you might desperately desire to sell your current home as soon as possible. To help you accomplish this important task, consider hiring an experienced, real estate agent in your community. This individual can help you select the perfect selling price for your house. Your real estate agent can also provide valuable information about staging your home to perfection. For instance, to make your home more inviting, your real estate agent might suggest you purchase new bedding, window treatments, and artwork. On this blog, I hope you will discover how a real estate agent can help you sell your home fast. Enjoy!