Why Appraisals Are An Important Part Of The Loan Process
The Value of a home is subject to many factors and the appraiser is the one who has the formula to average all those facts in order to put a monetary value on a home.
Whether you are buying or selling, it’s very important that your realtor is in tune with the market conditions and the average home prices in your area. They can look this information up and see if a house is listed above or below similar homes in your area. It is important that the price reflect an accurate value of the home because a bank will not approve a loan for more than an appraiser determines it value.
So even if you really love a house and it’s listed at $200,000 but you offer $210,000 to secure it, if the appraised value of the home is only $200,000 then that’s all the bank with approve for a loan.
The following are factors that will help an appraiser set a value on your home:
•House Layout and the number of bedrooms and bathrooms
•Age of the house and its overall appearance
•Updates and Remodeling
•Average price of homes sold in your neighborhood
This isn’t a problem that everyone runs into when buying a home, but if it happens to you there are a few ways to work it out. You can try and renegotiate the price with the seller because their house may be overpriced for the area. You can request another appraisal if you truly think the value is incorrect. Having a good realtor on your side can help you avoid these pitfalls. If they are following the market, they will probably be able to warn you if they think there may be an issue with the appraisal.