An appraisal is a necessary step when purchasing a home that your bank will require. The lender will appraise the home to ensure that it is actually worth the money that it’ll be lending you. If the appraisal is acceptable the lender will loan you 80 or 90% of the total worth of the property. To complete the purchase an appraisal is crucial.
The individual that performs the appraisal is a real estate appraiser who has been licensed to do so and the bank will sometimes provide an appraiser contracted by their company. The appraiser will visit the property and will evaluate the value of the home according to fairly complicated criteria. The appraiser will then report to the bank what he estimates your house to be worth.
Most people think the appraisal is not important but the lender won’t loan you the cash to purchase your home until the appraiser has submitted his report. You’ll find that the appraisal results play a very important part of the home purchasing process. The appraiser will submit a detailed evaluation of the home’s worth to the bank for the bank to establish how much your home is worth.
Many people find that the appraisal comes out to be less than the price they offered for the property and this may be a problem. The lender will only give you a portion of the amount that they think your home is worth meaning that you are going to need to put up extra cash yourself or the seller must lower the price. You will need to find a way to make up the difference. The choice is yours if you would like to keep going with the purchase or if you would like to keep looking for another home.
Any earnest money that you have put down will be returned to you if the buying agreement expires or else you will simply move forward with the deal if the home appraises. Once the appraisal is done you will know how much your home is worth and how much money the lender will approve for your mortgage loan.
Learn more about appraisals and the home purchasing process at New Homes Tampa.
If you are considering purchasing or selling a home, condo or any other type of real estate, you will most likely need the services of a real estate appraiser. An appraiser performs an assessment of properties and other types of real estate to help establish its value. While there are several methods appraisers use to establish the value of real estate (e.g. cost method, income method, and comparison method), for residential properties, the comparison method (also known as market value) is the most common approach. The appraiser’s job is to provide an opinion about the value of a property based on its “highest and best use.” If you are financing the purchase of a property, your lender will normally require an appraisal to make sure that the property is really worth the amount loaned.
The real estate appraiser is tasked with carrying out a completely objective assessment of a property and will normally provide a written evaluation report. This is accomplished by a physical inspection of the property, as well as a comparison to other similar properties for which the value is already established. To make a determination about value, the appraiser gathers details such as the size of a property, size of the lot, location, condition, best use of the property, amenities, etc.
After this initial inspection, the appraiser may scout the neighborhood to compare the property with other similar properties in the neighborhood by age, size, price range, etc. The appraiser then gathers additional data from several sources such as the local Multiple Listing Services (MLS), which provides information on current and recent comparable sales. The appraiser also gathers information from his/her own past experience in the local market. All of these sources of information are taken into consideration while writing the appraisal report, which will provide an estimate about the value of a property.
There are many reasons to use the services of a qualified appraiser. When purchasing real estate, an appraisal provides you with a negotiating tool and helps ensure that the price you are paying is appropriate. If you are selling your property, the appraisal will help you determine an appropriate price range. Besides real estate and mortgage transactions, you may need to order an appraisal to lower the tax burden (assuming the value is really lower than the value established by taxing authorities), to establish the replacement cost of insurance, to settle an estate, etc. An appraiser only gives an estimate of the value of the property. A real estate appraiser is not to be confused with a home inspector.
If you are considering buying or selling a home, condo or any other type of real estate, you can use the services of a qualified real estate appraiser who will provide an estimate of the fair market value of your property.