Appraisals have become a hot topic in today’s market, so we wanted to take the opportunity to discuss them. An appraisal is what the bank uses to determine the true value of a home that is being bought and sold. The appraisal is done by a certified home appraiser, who is an independent third party in the transaction.
Essentially, the appraiser will take the property you're buying or selling and look for homes in the area with similar amenities, features, and square footage to compare them. They are using information based on past sales to validate the price the home is currently being sold at.
Appraisals have become more relevant in our market because we’re seeing a lot of home appreciation and a lot more homes that fail to appraise. If an appraiser takes information from a home that sold three months ago, it might not appraise at the value you’re selling it for until three months later. That’s when we have issues with low appraisals.
“
Appraisals have become more relevant in our market.
”
If you're a buyer, an appraisal is meant to protect you so you don’t overpay for a home. It can have a negative effect on buyers, too. Let’s say you fall in love with a house and agree to pay a price you’re happy with. If the appraisal comes in too low, the bank won’t loan you more than the appraised value. If it’s $10,000 or even $50,000 less than what you agreed to pay, you have to renegotiate or walk away from the home if the seller isn’t willing to do that.
As a seller, the appraisal affects you more than anything. If you have a low appraisal, you’re going to have to either renegotiate on your price or risk the seller walking away. When we see an appreciating market like this, appraisals become much more of a hot topic.
If you have any questions for us about this topic or anything else real estate-related, give us a call or send us an email. We would love to hear from you.
No comments :
Post a Comment