Posted on: 2 March 2021
From the time you receive an offer on your home to the day you close, a lot of steps must occur. Each step is vital for the home closing process, and one of these steps is an appraisal. Do you know why the buyer gets an appraisal, and do you understand the effects it has on the sale? As you prepare to sell your home, you might benefit by knowing the following three things about real estate appraisals.
1. Why the Buyer Needs One
An appraisal is an assessment of a home that tells how much the home is currently worth. Buyers need appraisals for two reasons:
- Their lenders require them.
- Buyers want to make sure they pay the right price for the property.
A lender requires an appraisal to minimize their risks with issuing a loan. When a person applies for a loan, the lender approves them based on specific criteria. When this occurs, they tell the person the percentage they will loan them to buy a house. They might agree to loan 80% of the home's value or more. The lender bases the loan amount on the appraised value.
Buyers feel more confident with their purchases when they find out the home's appraised value. They will know that they are paying the right price for the house.
2. The Effects the Appraisal Has on Your Home Sale
As the seller, you will need the appraisal to come back at a value that equals the offer amount. If it comes back higher than this, you will not experience problems with the sale. If it comes back lower, the buyer can ask you to lower the price. Buyers do not have to buy homes for amounts higher than the appraised values.
3. What You Can Do to Prevent Problems When Selling
When you decide to sell your house, you can do a few things to ensure that the house appraisal will not interfere with the sale. The first thing you can do is to fix up your home. If you fix things and improve the looks, it should appraise for a higher amount. Secondly, you can get an appraisal of your home before listing it to determine the home's value at the time.
If you have questions about selling your home or getting it appraised, talk to your real estate agent or a local home appraiser to learn more about these things.Share