Whether you’re looking to move to the area or simply want to purchase a vacation home in St. Thomas, the experts at Real Solutions Real Estate and Management Services are here to help. Offering outstanding service, and expertise throughout the region, we’ll make sure your real estate journey is a successful one.
Why You Should Care About Home Appraisals: Guide for Buyers and Sellers
Whether you’re buying, selling, or refinancing, expect a home appraisal as a part of the process. The results of the appraisal matter – they influence the final sale price of the property and can make or break the transaction. As such, for a fair and smooth deal, Real Solutions Real Estate and Management Services advises both buyers and sellers to inform themselves about the whole process.
What is a home appraisal?
A home appraisal determines the fair market value of a property. An unbiased professional, called an appraiser, makes the evaluation. Lenders use the appraisal to calculate the amount they’re willing to give buyers. Further, sellers and buyers both use the results to check if the property’s contract price is equitable.
How long does a home appraisal take?
As Orchard can attest, home appraisals can take 20 minutes to 3 hours. The appraiser will visit your house for a walkthrough. They will take photos and make measurements if appropriate, review comparable homes, and finally make a (usually 10-page) report. The entire process can take from 2 to 10 days. Sometimes it can take longer.
Can I trust a home appraisal?
The Appraisal Institute says home appraisers are required by federal law to be impartial. They must have no direct or indirect interest in the transaction. However, be aware that appraisers are often used to support an existing purchase price or loan amount. They won’t give you an independent estimate of a home’s value. Finally, appraisers are human, like all of us, and sometimes make mistakes.
Essentially, you can trust your appraiser to give an unbiased opinion but you should always do your own research and come up with an independent estimate of the property’s value. Here are some tips for both sellers and buyers on the appraisal process:
When you’re selling
- Research and compare property values
Take a look at the properties sold recently in your area. How much did they go for and what features did they have? Compare your home with them to figure out how much you can expect. At this stage, you should also brainstorm ideas to drive up your property’s valuation.
- Clean, declutter, repair, and improve
Homes are typically appraised in $500 increments. Simply cleaning, decluttering, and making repairs can significantly drive up the property’s value. Cosmetic and functional changes have significantly more impact. If you do make upgrades to your home, you should document them.
- Be involved with the appraisal
Be the tour guide when your appraiser comes calling. Walk them through the highlights of your property and point out any features that may be easy to overlook. Finally, talk to your appraiser about the highest offers you’ve received and present them a list if you can.
When you’re buying
- Know the market
Research the market and find a dedicated agent from Real Solutions Real Estate and Management Services who knows the area. Without adequate research, you may end up paying far more than what it’s worth. You will also need the data to determine whether the appraisal was spot on or not.
- Negotiate and renegotiate
If the appraisal is lower than the agreed-upon contract price, you should be able to renegotiate with the seller. Sometimes they won’t be amenable, especially if it’s a hot market. In these cases, the lender may ask you to make a bigger down payment to make up the difference. Be prepared.
- Appeal the appraisal
Not all appraisals are spot-on. If you spot errors in the appraisal – such as comparing properties being in a different neighborhood or incorrect measurements – note the inconsistencies down and get in touch with your lender. A second appraisal might be in order.
Conclusion
Appraisals are put in place to protect all the parties involved – buyers, sellers, and lenders alike. Don’t stress the results of the appraisal. Whatever the outcome, sellers can still negotiate a higher price and buyers a lower one. Finally, remember that you’re always free to walk away from the transaction at any time.
Image via Unsplash
This blog was written by Courtney Rosenfeld of Gig Spark. We appreciate her contributions and hope to hear more from her.