What To Know About A Home Appraisal
A home appraisal is a professional evaluation or estimate of the value of a house. This is an integral part of purchasing a property, especially if you need to get a mortgage loan from a lender. An appraisal is used to determine if the home's price is worth it given its location, environment, features, and the price of several other homes similar to it. Also, it helps a lender to be assured that he is not handing the borrower more money than the house is worth. This is necessary because the property serves as collateral in the case of a mortgage loan, so it's not a good idea to borrow a borrower more money than a house is worth in case the borrower defaults on the payment.
A house appraisal is similar to a home inspection in that both require the appraiser or inspector to go through the house while checking every room, appliance, and general home details, but the major difference lies in that; an appraiser aims to determine the value of a house, while an inspector aims to detect faults in the building of the house. An appraisal is an art that requires thoroughness, neutrality, and professionalism. The appraiser should be familiar with the environment and have no relation to the transaction save based on the appraisal. An appraiser has to be licensed and insured for the appraisal and must be impartial.
An appraisal is an essential part of most real estate transactions and the lender orders for the appraisals because it protects mainly their interest. The appraisal cost is borne by the buyer. The appraisal value of a house is influenced by several key factors such as the number of bedrooms, the square footage of the house, and other home amenities. The appraisal also has to be on the lookout for needed repairs which might affect the value of the house adversely.
An appraisal report covers descriptions of the neighborhood, the house, and a comparison of nearby houses. The report must include specific details about the property and a comparison of similar properties which have been sold. The appraiser provides concern on issues that may affect the property's value, as well as indicating significant problems such as where repairs are needed.
The appraisal report is delivered to the person who ordered it, and not necessarily the person who paid for it. In some cases, a seller might choose to pay for an appraisal to quickly choose a deal, and find themselves denied access to the report. The lender is given the report and reserves the right to give it to another person. In most cases, the buyer pays for the appraisal, and the lender is required by law to hand over a copy of the appraisal report.
An appraisal can be challenged, especially if it looks low. You can discuss with the appraiser and present questions on why the value of the house was estimated as such a low price. Your belief about the value of certain aspects of your home might not be the same as that of the appraiser. In such a case, be ready to validate your argument with proof, or you might request another appraisal.
In any case, if an appraisal values a house at a lower price, this might call off the contract as lenders want to protect themselves financially and might insist on not paying for a house evaluated at a low price.