When it comes to the term “home” appraisal, are you fully-aware of what will be going on? If you’re currently in the market to buy a home through a mortgage, considering refinancing your current mortgage, or will be selling your property to anyone other than an all-cash buyer, you’ll want to be fully mindful of the process you’re going to be embarking on. Therefore, we’d thought you would offer you more easily-digestible bites of information to help you through…
In laymen’s terms, a home appraisal is nothing more than a professional third-party providing an unbiased opinion on the value of your property. This amount is used to determine the contract price in the final transaction. The value is determined using the location, features and overall condition of a home.
In a lending scenario, lenders and banks do not want homeowners borrowing for a property for more than it’s worth. Why? Because in an absolute worst-case scenario, should the mortgage be defaulted upon, the appraised value protects the lender against itself so it doesn’t lend more than it can actually recover.
What that said, it is generally the lending party who will actually order the appraisal. It is required in all 50 states that a qualified appraiser be certified or licensed and very familiar with the area in which the property is. Some lending organizations additionally require them to have experience with like properties in the same geographic region.
What exactly is taken into consideration?
- Recent sales of similar homes
- Current real estate market trends
- Square footage
- The number of bedrooms and bathrooms
- What amenities the home possesses
A complete visual interior and exterior inspection will be conducted and any obvious repairs that will need to be done will show against the appraised value.
A final report by the appraisal will most likely include these items:
- Street map with comparable recent sales in the area
- How square footage was determined
- Photos of the front and back of the house as well as the street view
- Front photos of area comparables
- Relevant data such as tax records, lands records and market sales data
So many factors go into a property sales transaction, but if you’re educated enough on the entire process, our hope here at American Dream Realty is that we made it a little less overwhelming for you.