The Lowdown on Home Appraisals and
Why They’re Essential to the Buying and
Along with historically-low interest rates has come a hot real estate market. It’s a wonderful time to buy and sell, and such a market tends to encourage both parties to cut corners and close quickly.
While having a quick purchase or sale on favorable terms seems desirable, there are numerous pitfalls that can come from not going through each step and doing proper due diligence. One thing that should not be skipped is obtaining an appraisal. Las Vegas Real Estate Corner strives to provide helpful information and advice on all things real estate. Below, you’ll find out why appraisals play such a significant role in any real estate transaction.
What is a Property Appraisal?
A home appraisal inspects the condition of the property, location of the property, and looks at comparable sales within the area. Both the condition and the comparable sales help to determine the unbiased estimated value of a property. An appraisal is typically required during a mortgage lending process or refinance in order to help a lender ensure the amount they will be lending doesn’t exceed the value of the property.
Image via Pixabay
When to Get an Appraisal?
For a seller, getting a pre-listing appraisal will help establish a feel for the current market and help determine if it is worth putting the house on the market. A buyer should seek to have an appraisal done during the due diligence period. If an appraisal results in a lower value than the house is listed for, then that may lead to a buyer having leverage to negotiate the price downwards or risk putting an additional down payment for any amount the lender will not cover.
How to Get an Appraisal?
You or your lender will need to retain the services of a professional appraiser. Appraisers are highly trained in the field and are licensed/certified to determine the fair market value of a property. Since an appraiser has no dog in the fight and no allegiance to either party, they can objectively look at all the facts surrounding the property and arrive at an unbiased figure. The appraiser’s opinion will also be accompanied by a report that will detail their findings which serve as the basis for their estimate.
Appraisals in Light of Today’s Market
The real estate market is booming. It’s hard to keep property on the market, the inventory for a seller is slim, and because of that, many properties are selling above market value. Appraisals are not necessarily taking into consideration the current trends where a seller may receive multiple offers due to a lack of inventory. Serious buyers should be prepared for the seller’s market and, if lending, be prepared to put down larger down payments to cover any costs that may be above and beyond an appraisal.
What to Do With an Appraisal You Believe is Low
If an appraisal seems low, it’s worth asking for another review. Especially if you’re a seller, no one will know your property better than you. Simply ask the appraiser tomage via Pixabayreevaluate their report. You can provide them with additional details about comparable or other information that you may know about specific sales. You can also request an independent appraiser to come and give a second opinion. If anything, a second appraisal would give you peace of mind that you have the right numbers in front of you to make the best decision.
If you are taking out a mortgage or refinancing, there is no way around getting an appraisal. Even if you’re not required to obtain an appraisal, you should get one anyway to ensure you are getting the most for your money. Let the advice from an experienced professional help guide your decisions. In the long run, you will be thankful you based your decision on sound data.
If you would like to see more helpful information and advice on real estate transactions, visit the Las Vegas Real Estate Corner blog today!
Lisa Walker is a proud stay-at-home mom. When she’s not spending time with her boys or on a new home improvement project, she and her husband, Jake, enjoy trail hiking and beach-coming. Contact her at firstname.lastname@example.org