Buyers and sellers need to know these few things about appraisals.
How much do you know about appraisals? If you are thinking about entering the real estate market in any capacity, you should be familiar with this subject.
An appraisal is an expert opinion on value. For this, an appraiser will go to a home to evaluate it and provide a report to the lender to give them a good idea of the home’s market value. The appraisal is to protect the lender and ensure that the buyer isn’t overpaying for the home. To help you better understand appraisals, here are three common questions I get about them:
1. What is an appraiser looking for? An appraiser will look at comparable homes within the same area that have similar styles, square footage, number of bedrooms, number of bathrooms, a garage, and more. They’ll do a walk-through of the home to see the quality of the construction. Also, they’ll want to know if the owner has done any major upgrades to the house.
“The appraisal is to protect the lender and ensure that the buyer isn’t overpaying for the home.”
2. Should a seller get an appraisal done on their home before listing? My advice is always no, and that is because the buyer’s agent will probably require the buyer to get their own appraisal, so the seller’s one will just be a waste of money. If you are a seller and want a good idea of what an appraiser would value your home at, you can consult with a real estate professional like myself.
3. What is an appraisal gap? If a home appraises at less than what the purchase price is, an appraisal gap occurs. These have become more common in our market now that it is moving a little faster. There are a lot of different tactics that can be used when negotiating an offer and navigating an appraisal gap, so ask a professional for help with your specific situation.
If you have more questions about appraisals or anything else related to real estate, please don’t hesitate to reach out. You can call or email me anytime. I look forward to hearing from you!
