What to Expect From the Home Appraisal
With a solid offer for your home in hand, the stressful part is over and you’re ready to kick back and relax until closing day. But, according to the National Association of Realtors, the reality is that 25 percent of home sales get delayed before closing, and appraisals cause 20 percent of those delays.
If the buyer is getting a loan to purchase your home, there’s no way to forego the home appraisal. Lenders want to be sure that home buyers are not over-borrowing for a property because the home serves as collateral for the mortgage. An appraisal helps the lender protect themselves against lending more than it would be able to recoup if the home goes into foreclosure.
Once you’re under contract with a home buyer, the buyer’s lender assigns a residential appraiser to assess the fair market value of the home. Lender’s typically order the appraisal to be completed just in time for closing day, and it’s generally the buyer’s responsibility to pay for the assessment.
Laws require that appraisers be licensed, and banks must follow to specific regulations in selecting the appraiser. The multi-page, detailed report documents the condition of the home and the neighborhood, and also takes into account any comparable properties in the area.
Sellers should be prepared to give the appraiser full access to the entire house – including the basement, garage, attic, and crawl spaces, and take note that appraisers will be taking photos of the house to include in the report.
The appraised value is guided by recent sales of similar properties as well as current market trends. Other key factors include the home’s amenities, number of bedrooms and bathrooms, floor plan functionality, and square footage. After a complete visual inspection of the interior and exterior, the appraiser will note any conditions that adversely affect the property’s value, such as needed repairs.
Hopefully, the home appraisal is just another step to check off before closing. In situations where the appraised value is lower than expected, the transaction can be delayed or even canceled. Most of the time neither the buyer nor the seller wants the transaction to fall through.
Appraisals can help buyers steer clear of overpaying, yet sometimes sellers feel that a low appraisal is inaccurate and can be reluctant to drop the price. Unfortunately, recent distressed sales in your surrounding area can lower your home’s appraisal value.
Holding out for an all-cash buyer who doesn’t require an appraisal as a condition of completing the transaction is unlikely to net you a higher sales price. If a low appraisal becomes a barrier for a home purchase or sale, it is possible to get a second opinion.
To get the most money out of your home sale and be better prepared it pays off to do everything right from the start. A professional Realtor can identify and eliminate issues while helping sellers confidently navigate the transaction and saving sellers thousands of dollars.
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For a no-obligation consultation, call today: 719-536-4326 or visit PlatinumHomesSales.com.