Home appraisals are actually done to protect the lender, not the buyer or the seller. That’s why they’re done before the financial institution gives final approval on a buyer’s loan. Banks don’t want to lend money on a house that is overpriced. The appraiser will generally give the lender an estimate of how much time the property will take to sell at a specific price.
Factors that enter into an appraiser’s estimate of the value of a home include: the lot size, the location of the property, its proximity to highways, schools and town services, the sq. footage of living space within the home, its overall condition, and the recent sale prices of comparable properties within the community.
Appraisers don’t care about the homeowner’s housekeeping prowess or lack thereof. Whether or not the property is clean or cluttered doesn’t matter. But things like structural defects, flaking paint, cracked or broken windows, ripped rugs, scratched and stained wood floors and a lopsided deck do matter.
Appraisals and home inspections are not the same thing. The appraiser is giving an opinion of value for the lender while a home inspector is there to inform the buyer about the condition of the property and point out the good, the bad, and the ugly.
If you’re applying for a mortgage, you will probably have to pay for the bank appraisal. This is not the same procedure as a CMA (comparative market analysis) which your Realtor will provide for free.
Remember, if the appraisal comes in low, it’s not necessarily the end of the road. Many problems are fixable and your Realtor can suggest what steps to take next to keep the ball in play.
If you would like to learn more about the appraisal process, or have other home buying and selling needs contact a Jack Conway Agent today!