Key Words : Appraisal

An appraisal is the estimation of a home’s current market value.  

The value of the home is calculated by examining the current local housing market and the comparable properties that have recently sold. It also includes the features of the home, square footage and number of bedrooms and bathrooms. 

The appraisal also includes the overall condition of the home, as well as the landscaping. If there is maintenance or repairs that will need to be completed, the appraiser will note these. 

An appraisal is required by mortgage lenders to be sure that the money they are lending to a new homeowner or a current homeowner is a fair amount for the home. 

The lender wants to be sure that the buyers are not overpaying for the property. This is to protect the lender, because If the borrower stops making payments on the home and the lender needs to sell it, the lender wants to be sure it can recuperate the amount owed on the loan.

But be aware, the appraisal can potentially break a real estate deal. 

If the selling price and the appraisal are not comparable, the lender will not approve the deal. The lender will not want to lend money for a home that is not worth the amount being loaned. As a buyer, this can be a good negotiation tool. No one wants to overpay for a home.

As you can see, understanding the appraisal process is important to both home buyers and sellers.