When you plan to buy or sell a home, it is a good idea to have it appraised first. A professional real estate appraiser can assess the home and determine its certified appraisal value.
They consider several factors to determine the appraisal value, such as public property appraisal records and the home’s current condition.
This third-party appraiser does not work for any local city or county government agencies, so their appraisal is not an official market assessed value.
Instead, it is a more specific value that considers the current market trends, comparable sales, and other factors that a local public appraiser fails to check.
It costs money to hire a home appraiser regardless of whether the home sells or not. Sometimes the buyer and seller split the appraisal service costs, while other times, it is the buyer or seller that pays for it entirely.
It depends on which party has more to gain from the appraisal. Make sure you hire a licensed appraiser who is authorized to provide appraisal values in your location.
Many professional real estate agencies, such as Arnold Property, can perform an appraisal for you too.
Below are seven reasons why you should get your home appraised.
1) Get Approval of a Mortgage Loan
Mortgage lenders want to know the home appraisal value before they issue a mortgage loan to a borrower.
The home is the collateral of the loan in case the borrower defaults on it. The lender wants to make sure the home appraisal value is not lower than the mortgage amount.
Many lenders will deny your mortgage loan application unless you show them a certified appraisal report of the home.
So, if you are a buyer who desperately wants to purchase a particular home, you should invest in a home appraisal service to get that report.
If the home appraisal value is higher or equal to the sales price, then your loan application will likely get approved.
2) Get a Better Deal as a Buyer
Homebuyers do not want to get ripped off. A home might look beautiful on the surface, but it could need dozens of repairs to its electrical wiring, plumbing, flooring, and appliances.
You will not know it without the help of an appraiser. A home appraiser considers the estimated costs of the repairs needed, which ends up lowering the final appraisal value.
That way, the buyer will not overspend on a home that is a fixer-upper in disguise.
3) Get a Better Deal as a Seller
If you are a home seller, you will want to sell your home for the highest price possible. But you cannot rely on the assessed public value because it will not consider all the improvements and
upgrades you have made to the home.
Their assessments are done from the outside only. On the other hand, a third-party
appraiser does a thorough inspection of the inside and outside to determine its real value.
All the repairs and renovations made to the home will get factored into the final appraisal value. As a result, you could end up with a higher appraisal value than what is listed in the public records.
Then you can ask for a higher sales price when you list your home on the market.
4) Refinance Your Home
If you have made on-time mortgage payments for a couple of years, you could be eligible to refinance your mortgage for a lower interest rate.
But before your refinancing application gets approved, the lender will want to see an updated appraisal report.
You will not need to pay for a comprehensive appraisal. A straightforward “drive-by appraisal” is
all that is required for a refinancing application to get approved. It costs less and can get done quickly.
5) Get a Business Loan
Are you starting a small business and plan to apply for a business loan? If so, the lender will want to see your home’s value because it will be used as collateral for the loan.
An appraisal report will give them this information. You will get approved for a business loan if your home’s appraisal value is higher than the loan amount or at least equal to it.
6) Find Good Investments
Real estate investors frequently hire appraisers to help them find valuable investment properties.
Since investors might not be familiar with market locations, they depend on appraisers to give them the actual value of individual homes of interest.
Use an appraiser to help you find a good investment opportunity in your desired location.
7) Getting a Divorce
Are you getting divorced? Divorce usually results in the marital assets getting split between the husband and wife.
Before a house gets split, its appraisal value must be given to the court. The judge will use the appraisal value to determine how much money each spouse receives from the home’s sale.