What Is An Appraisal and What If It Comes In Short?

    If you are thinking about selling your home now or in the near future and are curious about what your home would sell for in today’s market give us a call at 678-985-1234 or check out our instant home value estimator and receive an instant estimate of value.

    As a home seller, there are times when it is important to know the true value of your house. For Real Estate Houses Made Of Moneyexample, when it’s time to sell when you pay taxes, and if you are trying to refinance or take a mortgage out on it. As a home buyer, knowing the appraised value rather than just what the seller is asking, is an important factor when making an offer on the home.

    Appraisals are performed by licensed home appraisers. There are several methods an appraiser can use to determine the value of a home. The most common method when buying or refinancing a home is the ‘Sales Comparison Approach’.

    The Sales Comparison Approach compares the characteristics of the subject property with the characteristics of comparable properties which have recently sold and are in the same area as the subject property.

    Appraisers look for the most similar homes within the same area. They look at the number of bedrooms; number of bathrooms; age of the home; quality of home finishes; and square footage. As well as take into account the heating/air conditioning, plumbing, and wiring.

    The appraiser will take other factors into consideration as well. They will look at your property, and the location in relation to your neighbors, as well as how many homes are for sale in the area and the rate at which they are selling.

    Since the majority of the features are set and can’t be changed, there is not much that you can do to influence this part of the appraisal. As a home seller, however, there are some things you can do to that can make a difference in the appraised value.

    • Improve Overall Appeal: Keep the yard mowed, edged, and free of weeds. Keep the exterior and interior free of clutter. If possible, add a fresh coat of paint or improve the landscape in the yard.
    • Clean The House: The appraiser will get a much better impression if you have a clean and neat home.
    • Make A List Of Updates: Making a list and pointing out improvements that they may not notice will make the appraiser’s job easier. Appraisers are interested in permanent improvements such as new carpet or appliances.
    • Provide Comparable Homes: There are many factors that go into finding the appraised value of your home, but one of the biggest factors is how much similar homes in the area have been selling for. By providing the appraiser with the comparable properties may save them time and can lead to them to valuing the home higher.

    If the appraisal comes in below the accepted contract price, the lender will only approve the loan for the amount of the appraisal. When this happens there are a few options:

    • Seller brings the price down to the appraised value
    • Buyer increases the down payment to pay the difference
    • No agreement is made, contract is terminated

    Should the home fail to appraise for the contracted purchase price, the appraisal/financing contingency clause allows buyers to re-evaluate and, potentially, walk away.

    There is no better way to determine the true market value than to have a certified appraisal done on your home. You will be better in a stronger position to receive top dollar and avoid low-ball offer by providing a copy of the appraisal at showings.

    If you are thinking about selling your home now or in the near future and are curious about what your home would sell for in today’s market give us a call at 678-985-1234 or check out our instant home value estimator and receive an instant estimate of value.

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