Whether you’re buying a new house or putting your home on the market, understanding home appraisals is essential for a smooth real estate transaction. This comprehensive guide will shed light on everything you need to know about home appraisals.
Everything You Need to Know About Home Appraisals
In this guide, we’ll unravel various aspects of home appraisals, such as:
- Understanding home appraisals
- The role of an appraiser
- The home appraisal process
- How to prepare for a home appraisal
- The impact of appraisals on selling or buying a home
Here’s a closer look at each.
Understanding Home Appraisals
The concept of a home appraisal may seem simple, but there’s much more to it than meets the eye. As an integral part of real estate transactions, a home appraisal isn’t a cursory glance at a property but a deep, objective evaluation to determine its market value. An appraiser carries out this assessment, taking various factors into account, including the property’s condition, size, location, and features. For example, if the home has been recently renovated or has high-end appliances, this will likely increase the market value. The appraiser also considers external factors such as the neighborhood, nearby amenities, and even the street the house is on. All of these contribute to a fair and accurate appraisal.
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The Role of an Appraiser
An appraiser plays a pivotal role in a home appraisal. They’re more than just a bystander in real estate transactions. Instead, they’re certified professionals who’ve undergone rigorous training and passed stringent exams to provide an impartial valuation of a property. They’re bound by a code of ethics to perform their job without bias. This objectivity is key, as it ensures that the home’s selling price is fair, taking into account its condition, features, and the current state of the real estate market. An appraiser’s expertise and impartiality lend credibility to their valuation, making it a trusted tool for buyers, sellers, and lenders.
The Home Appraisal Process
Unraveling the home appraisal process provides a clearer picture of what it entails. It starts with the appraiser’s visit to the property, but this is far from a quick walk-through. Instead, the appraiser performs a meticulous inspection, examining the home’s condition, size, and features such as the layout, the materials used, any upgrades, and energy-efficient appliances. They also consider factors like the home’s age, floor plan functionality, quality of construction, and recent renovations. Following the property inspection, the appraiser delves into the recent sales data of comparable homes in the same neighborhood. The comparison of these “comps” helps the appraiser arrive at an estimated value for your home.
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How to Prepare for a Home Appraisal
When it comes to preparing for a home appraisal, it’s crucial to showcase your home at its best. This process begins with a thorough cleaning – a tidy, well-maintained property often leaves a better impression on the appraiser. However, it doesn’t stop there. Any minor repairs, such as fixing a leaky faucet or patching up chipped paint, could go a long way in enhancing your home’s perceived value. Significant improvements, like a new roof or updated kitchen, should be documented and shared with the appraiser. During the visit, be present to answer any questions the appraiser might have about the property and any upgrades you’ve done.
The Impact of Appraisals on Selling or Buying a Home
Understanding the role of a home appraisal in a real estate transaction underscores its importance. For sellers, an appraisal that aligns with or surpasses the asking price can justify the cost of the home, making potential buyers more willing to match the asking price. Conversely, for buyers, an appraisal serves as a safeguard, ensuring they aren’t overpaying for a property. If the appraisal value comes in below the contract price, it can be a critical factor in renegotiating the deal. In some cases, the buyer may need to make up the difference, or the seller may agree to lower the price. Hence, the outcome of a home appraisal significantly influences the trajectory of the real estate transaction.
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FAQ on Home Appraisals
Check out these frequently asked questions on home appraisals. If you don’t see the answer to your question here, give us a call — we’ll be happy to get you the answers you need.
Who pays for a home appraisal?
Typically, the buyer foots the bill for the home appraisal. It’s often a part of the closing costs and can range from $300 to $400, but it could vary depending on the size and location of the home.
How long does a home appraisal take?
The process of conducting a home appraisal usually takes a few hours, depending on the size of the property. However, the appraiser will need some additional time – usually a few days – to compile their report, which includes their findings and the estimated market value of your home.
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What happens if a home appraisal comes in low?
If a home appraisal comes in lower than the contract price, it can complicate the buying process. The lender might not approve a loan for more than the appraised value, which leaves the buyer with some options: They can make up the difference out of pocket, negotiate a lower price with the seller, or back out of the deal if the contract has an appraisal contingency clause.
Can I dispute a home appraisal if I think it’s too low?
Yes, you can dispute a home appraisal if you believe it’s inaccurate. You’ll need to provide strong evidence that supports your claim, such as recent sales data of similar homes that were overlooked by the appraiser. It’s important to approach this step professionally and factually to increase your chances of a reassessment.
Do appraisers know the selling price?
Yes, appraisers usually know the selling price. They often use it as a benchmark when determining the market value of a home. However, their goal is to provide an objective valuation based on the home’s condition, features, and comparable homes, irrespective of the selling price.
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Are You Buying a Home in Sierra Vista or Cochise County?
If you’re buying a home in Sierra Vista, Huachuca City, Palominas, Tombstone, Bisbee or elsewhere in Cochise County, the Amanda Ohnstad Team is here to help you have fun and get it done. While you’re here, check out our hottest home searches:
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