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Do I Need To Get My House Appraised Before Selling – The appraiser’s job is to determine the current value of a home or other property. Jonathan Storey/Getty Images
Of all the people you’ll interact with when buying or selling a home, the appraiser is the person you’ll likely know the least. But it may play one of the most important roles in the process of buying or selling a domain. What the appraiser finds can be the difference in whether or not you get the home you want or will be able to sell the home you don’t want.
Do I Need To Get My House Appraised Before Selling
A property appraisal is different from a property inspection. The inspector looks for problems that the buyer should be aware of before purchasing (for example, mold or a leaky roof). The appraiser determines the dollar value by considering what applies to similar items in the area, as well as the condition of the actual property. If you are borrowing money from a bank or other institution to purchase your product, you will likely need to get an appraisal (inspection is optional but buyers would be wise to get one).
Does An Appraisal Stay With A Property? • Birmingham Appraisal Blog
Here are 10 important things to know about appraisals, starting with why mortgage lenders require appraisals in the first place.
The main purpose of the appraisal is to reassure the mortgage lender that the price is worth the asking price. Banks and other mortgage lenders take significant risks when they lend hundreds of thousands of dollars to a buyer. If the buyer defaults on the loan, the lender’s only recourse is to foreclose and attempt to sell it. If the value of the loan is not the same, the bank will never get its money back.
That’s why the buyer usually pays for the appraisal, which costs $300 to $400 for a single family. The bank or mortgage lender generally has a group of appraisers it trusts to come up with an accurate appraisal.
If the appraisal comes back equal to or above the asking price, the sale can move forward, but if it comes back low, it can be a problem. The bank is unlikely to approve a mortgage above the appraised value, which is bad for the seller, who may have to lower the asking price.
Simple Steps To Contest A Low Home Appraisal [my Success Story]
Appraisers must physically inspect the property to determine its size and number of bedrooms and bathrooms, as well as any upgrades or defects it may have. Fatwaiti/Getty Images
Appraisers are usually on a tight schedule, especially in a hot housing market. Appraisers will only spend about 20 minutes on the actual appraisal, says Noble Fields, a certified appraiser trainer in San Francisco, California. The rest of their work happens in the office.
Appraisal reports follow Fannie Mae Form 1004, which requires the appraiser to physically inspect the property to confirm the size of the property, number of bedrooms and bathrooms, total square footage of the living area, any upgrades or defects in the home, and more. An experienced appraiser knows exactly what he is looking for and moves quickly through, checking every item on the form.
Because appraisers have a short time, it is important for the seller’s real estate agent to be present during the appraisal to point out important renovations or upgrades that may increase the appraisal value, or account for damages or needed repairs that may reduce the appraisal value.
How Will The Housing Boom Affect My Appraisal?
Legally, brokers and lenders can offer their opinions on a value, but they are not allowed to dictate to the appraiser what they want the value to be.
Have you ever heard someone complain that their neighbor with an untidy lawn or dilapidated driveway is “dropping values”? They may have a point. Since the value of your property is largely determined by the selling price of similar properties in your area, there is a lot that depends on how your neighbors take care of their property.
But more problematic than grassy lawns or paint jobs is a housing market that has been hit hard by foreclosures and short sales (when a financially troubled owner sells their home for less than the amount owed on the mortgage). These types of “distressed sales” can significantly reduce the values of similar properties in the neighborhood, including your home.
The good news is that most appraisers will try to rule out foreclosures and short sales if they can find other accurate companies nearby. But if the neighborhood is drowning in distressed sales, it will inevitably lead to a decline in the value of all products.
Chicago And South Suburban Appraisal Blog
Although a home’s cleanliness shouldn’t affect its value, it can affect your appraiser’s opinion, so make it look good. Andersen Ross/Getty Images
The appraiser will be at your home in about 20 minutes and you’re already walking around like a crazy person. So is it really important to take the dirty laundry out of the stuffed baskets and remove all the dog hair and dust bunnies? Yes Yes Yes! It’s true that your home is evaluated based on its square footage, number of rooms, and floor area, so technically, your housekeeping skills don’t count. But appraisers are human, and they are bound to be affected by a lot of chaos.
Appraiser trainer Noble Fields says appraisers appreciate the ability to move through the house freely without having to navigate over piles of clothes and other obstacles. Anything you can do to help get value at the top of the range versus the bottom is worth the extra effort.
Interestingly, the primary goal of an appraisal is not to calculate an objective value for a property based solely on its size and amenities, but to compare it to other values in the area that have recently sold. In order for an appraiser to determine s fair market value, he or she needs an up-to-date understanding of the local real estate market.
Black Homeowners Face Discrimination In Appraisals
The appraisal report includes space for three “comparable sales,” known in real estate parlance as “coms.” The appraiser will use real estate databases such as the MLS (Multiple Listing Services) and other public records to search for recently sold properties that are closest to the property in terms of its geographic location, size, age, condition, presentation, etc. on me. Generally, these homes will be in the same neighborhood as the home for sale.
To be accurate and useful, companies must be current. Again, if a real estate agent wants to make sure the seller is getting the best appraiser, he or she will provide the appraiser with a list of the most recent offers that come in at or above the asking price.
You know that hole in the wall where the thing came through and broke the thing? Cracked window pane that you temporarily repaired with duct tape? The dog-scratched back door and the crack in the basement door from repeated beatings by your rude teenager? All the things you’ve been meaning to get to and put off over and over again? Well, it’s time to get rid of these problems and fix them all.
Not only will the damage affect your appraisal in a negative way, but if your loan is insured by the Federal Housing Administration (FHA), appraisers must report the damages.
Everything You Need To Know About The Home Appraisal Process
There are certain situations where a seller may want to request their own appraisal. For example, it is not always clear what price it should be listed at. You may meet several real estate agents, each with very different suggestions for the initial asking price. If you set it too low, you’ll make less from the sale than you otherwise would, but if you set it too high, you’ll scare away potential buyers.
In this case, it is completely reasonable to pay $300-$400 for an independent appraisal to find the most accurate market value and set the price accordingly. Just know that the lender still wants their own appraisal, so your appraiser’s appraisal is not the final word.
The buyer has the right to see the appraisal, but the seller does not, unless the buyer wants to use it to negotiate a lower selling price. Hill Street Studios/Getty Images
Since the buyer pays for the evaluation, he or she is entitled to a free copy of the full report. Lenders are required to send appraisals to buyers immediately but at least no later than three days before the loan closes. If the appraisal comes in at a lower price than the price the buyer and seller agreed upon, the buyer will have good ammunition to negotiate a lower price.
How To Get A Home Appraisal For Free?
The only time a seller will see a copy of the appraisal report is if the buyer wants to use it to negotiate a lower selling price. If the appraisal comes back to or above the asking price, the seller has no reason to worry about it. In a hot real estate market, a buyer may have…
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