An appraisal is a crucial step in the home buying process as it determines the fair market value of the property you are interested in purchasing. A good appraisal is one that accurately reflects the current market value of the home based on a variety of factors such as location, size, condition, and comparable sales in the area.
A good appraisal should come in at or above the agreed-upon purchase price in order to secure financing for the home. If the appraisal comes in lower than the agreed-upon price, it can cause problems with obtaining a mortgage as lenders typically only finance up to the appraised value of the home.
What factors determine a home’s appraisal value?
The appraisal value of a home is determined by factors such as its location, size, condition, age, and recent sales of comparable properties in the area.
How can I prepare for a home appraisal?
To prepare for a home appraisal, make sure your home is clean and well-maintained, provide any renovations or upgrades you have done, and gather any documentation that may be helpful for the appraiser.
Can I challenge a low home appraisal?
Yes, you can challenge a low home appraisal by providing additional information or evidence to the appraiser that may support a higher value for the property.
What happens if the home doesn’t appraise for the agreed-upon price?
If the home doesn’t appraise for the agreed-upon price, you may need to renegotiate with the seller, come up with additional funds to cover the difference, or walk away from the deal.
Is the appraisal the same as a home inspection?
No, the appraisal is different from a home inspection. While an appraisal determines the value of the home, a home inspection evaluates the condition of the property and identifies any potential issues that may need to be addressed.
Who pays for the home appraisal?
Typically, the buyer is responsible for paying for the home appraisal as part of the closing costs.
How long does a home appraisal take?
A home appraisal usually takes a few days to a week to complete, depending on the workload of the appraiser and the complexity of the property.
Can I choose my own appraiser?
In most cases, lenders will choose the appraiser to ensure independence and unbiased valuations. However, some lenders may allow you to choose from a list of approved appraisers.
What should I do if the appraisal comes in higher than the purchase price?
If the appraisal comes in higher than the purchase price, it can be a positive outcome for the buyer as it means you are getting a good deal on the property.
What if the appraiser is not familiar with the area?
If the appraiser is not familiar with the area, it may be helpful to provide them with information about the local market, recent sales, and any unique features of the neighborhood that may affect the value of the home.
Can I get a copy of the home appraisal?
Yes, as the buyer, you are entitled to receive a copy of the home appraisal report. Reviewing the appraisal report can help you understand how the appraiser arrived at the value of the property.
What if the appraisal comes in lower than expected?
If the appraisal comes in lower than expected, you may need to reassess your options, such as renegotiating the price with the seller, coming up with additional funds, or exploring other financing options.