Buying or selling a home? You will most likely have to go through the appraisal process. So, what are appraisals? And, what do they mean for you? Austin has the explanation in this Week’s Theory Thursday!
So you’ve found your dream home. You’ve made an offer. Your offer was accepted by the seller. You’re through inspection. And now it’s time for the appraisal.
Hey guys, Austin here with Theory Real Estate, and welcome to another Theory Thursday. Today we are tackling appraisals.
So, what is an appraisal?
A home appraisal is an unbiased estimate of the value of a home. All lenders order an appraisal during the mortgage loan process as an objective way to assess the home’s market value and ensure that the purchase price of the home is justified.
How does it work?
Appraisals are conducted by highly-trained professionals who are licensed to determine the value of a home fairly, objectively, and without bias. While no appraiser is infallible, his or her opinion of the value of your home is informed by rigorous training, numerous tests, several years of on-the-job experience, and required continuing education. They are also required to provide evidence for every finding in their reports.
The appraiser will go to the home and determine its value by analyzing recent sales information for similar properties, the current condition of the property, and the location of the property. The appraiser will then create their appraisal report, adding or subtracting value as necessary.
If the appraisal comes in “at value”, everyone is happy – The sale of the home is able to move forward towards closing.
If the appraisal comes in low, there are a few options if you want to save the deal, including re-negotiating the purchase price, paying cash for the difference between the purchase price and the appraised value, or submitting an appraisal rebuttal. If the appraisal comes in low when you are buying or selling a home, work with your Real Estate Agent to determine the best course of action.