Summer Time

Summertime is a very busy time for real estate agents. With so many home buyers decide to enter the market during this time of year.

Today, we’re going to share four things that every home buyer should know about appraisals.

What Are Appraisals and Why Are They Important?

An appraisal is the valuation of a property by the estimate of an authorized appraiser ordered by the bank on an accepted purchase and sales agreement.

Unless you’re purchasing a house with a cash offer, then you will more than likely end up requesting a loan.

When you ask for that loan, banks reference your home’s appraisal as a way of deciding how much money to loan to you. That’s why appraisals are so important.

Let’s say you make a purchase offer on a home for $320,000. You need a loan for exactly that amount.

However, when the appraisal comes back, it says the home is worth only $300,000 and the bank is not willing to give you any more than that.

This means that you’re faced with a $20,000 budget gap — and if you’re unable to come up with the difference than that’s enough to kill a real estate transaction. This is just one example and most often people are putting money down.

Valuation Property Appraisal

There’s No Reason to Worry — We Can Help!

Here is some valuable information on appraisals that may help you avoid unfortunate situations like the one above:

Appraisers must meet certain criteria first. According to the Appraisal Institute, a qualified appraiser should be licensed or certified and also should be familiar with the local area. Federal regulations stipulate that the appraiser must be impartial and have no direct or indirect interest in the transaction. Fannie Mae even requires that appraisers certify that they have experience appraising similar properties in the same area.

Appraisal values are influenced by a number of factors. For instance, appraisers will consider recent sales and current market trends. They’ll also factor in such things as the home’s amenities, number of bedrooms, floor plan functionality, and several other factors when conducting their assessment.

Appraisals Value Money

Appraisers are required to do a complete visual inspection of the interior and exterior of the home. During this time, they’re also required to note any conditions that may adversely impact the property’s value. This may include needed repairs. Often while working you will notice the appraiser taking photos to pair along with their notes. 

Generally speaking, appraisers use Fannie Mae’s Uniform Residential Appraisal Report for single-family homes. This report asks the appraiser a number of questions, including what the home’s interior and exterior look like, what neighborhood it is located in and what nearby comparable sales there have been. After providing all of this information, the appraiser offers an analysis and conclusions about the property’s value based on this information. Remember sold comparables are the most heavily weighed items on a home value.

We Are Ready To Help You At Every Stage of the Home Buying Process

We hope you found the above information useful as a prospective home buyer and we want you to know that we’ll be there to assist you in order to make the experience as seamless and stress free as possible. 

Contact us today to learn more about the services we provide and the valuable advice and insights that Movementum Realty can offer. We would be more than happy to pair you with one of our move mentors to help.