A home appraisal is a process whereby a real estate appraiser inspects a home and determines its fair market value. This process is valuable to both the sellers and the buyers. Mortgage lenders often insist on this process before approving a home loan for a buyer. If you are a seller, it is important to understand how the process works as it will help you know how the value of a home is determined. In the article below, find some common myths about the appraisal process you need to stop believing.
An Appraisal Dictates The Amount The Buyer Should Pay
This is not true. Appraisers only state the value of a home based on its condition. That does not mean that the amount they quote is what the buyer will pay. An appraisal process is a tool that lenders use to safeguard their investments. If the price they quote is lower than what the seller has stated, it is the responsibility of the seller and the buyer to negotiate and see how they will cover the difference.
All Home Improvements Add value to A Home
There are renovations such as bathroom remodeling or kitchen upgrades that will add value to your home. Then others will not make a difference. Appraisers base their reports on things like square footage, number of rooms, foundation, etc. If you converted your garage to a gym, do not expect the appraiser to give your home a high value suddenly.
An Appraisal is the Same as a Home Inspection
It is easy to assume that these two processes are the same. As reminded by Cooksey & Associates, while these processes are for safeguarding a lender and buyer, they have some differences. The appraiser’s job is to determine the market value of a home depending on its condition, while an inspector’s job is to uncover whether there is a problem with a house.
If you are about to sell your home, talk to your local realtor about how you can prepare for this process. Realtors will give you the necessary information on what appraisers look for.