What Is a Home Appraisal?
A home appraisal is an assessment of the current market value of the residence and suggests the price a willing buyer would pay for a property.
The appraised value of a home is based on the property’s condition as well as prices recently paid for similar homes in the area.
An appraisal is a key step toward closing the sale of a home and assures a lender that the home is worth the amount being borrowed.
What do home appraisers look for?
An appraiser’s report will include a detailed description of the property.
- Interior and exterior condition
- Room count
- Improvements, repairs and renovations
- Plumbing and electricity
- Age of the structure
- Local market trends
- Condition of surrounding properties
Square footage, construction quality and recent upgrades also may be mentioned in an appraisal report.
How much does an appraisal cost?
Appraisal cost is usually $300 to $500 [P(1] to be paid by the buyer. Because the mortgage lender typically requests the appraisal, the fee can be added to loan closing costs.
What happens if an appraisal is too low?
The appraised value can sometimes be less than the seller’s asking price.
If that happens, the buyer and mortgage lender may be able to negotiate a lower price to match the estimated value. A motivated seller may agree to an adjusted price or seek a second evaluation.
What is an appraisal waiver?
An appraisal can delay the closing process and costs extra money, so it is possible for it to be waived. The risk with an appraisal waiver is overpaying for a property that isn’t worth the asking price. And while an appraisal is not officially an inspection, it can point out issues with a home that the buyer or even the seller might not be aware of.
How to prepare for a home appraisal
If you plan to sell or refinance your home, there are a few steps you can take to prepare for your property appraisal.
- Freshen up the home’s exterior
- Take care of your lawn and yards
- Make any outdoor improvements
- Keep up the home’s interior
- Clean inside home and make necessary repairs
Keep in mind that the appraisers are heavily regulated at the state and federal levels, and are required to be impartial, unbiased and compliant with Fair Housing laws. They also are required to be free of any interest in the transaction’s outcome so their assessments can be trusted by all parties.
Ready to explore your options now that you know why a home appraisal is necessary? A Rate loan expert can walk you through the process and help you find the best options. Apply today!
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