Your Guide to Home appraisal
A quick look at the home appraisal process and its importance
- August 2, 2022
- 6:09 pm
- Education, Home Appraisal
You’ve decided it’s time to sell or you’ve found your dream home, and now it’s time to cross all your T’s and dot all your I’s before you take the next step. And one of the first items on your checklist the home appraisal. So, what exactly is that?
The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately.
During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has a deck, a view, or a large yard. The appraiser will also compare the home to several similar homes that were sold within the last six months in the area.
The final report must include a street map showing the property and the ones’ compared, photographs of the interior and exterior, an explanation on how the square footage was calculated, market sales data, public land records, and more.
After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safe-guard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
“If you’re a buyer hoping to close on a home, the results of an appraisal can mainly affect you in two ways. If the appraisal comes in at the same value or higher than the price you were going to pay for the home, then the transaction typically proceeds as planned. On the other hand, if the appraisal comes back at a lower value than the contract amount, then the process can be stalled or derailed in order to make sure you aren’t buying the home for more than it’s worth. “
In most cases, the home appraisal can be more daunting for the seller. If the appraisal comes back at a lower price than what you and the buyer had planned on, then most buyers will expect the seller to lower the price of the home in order to meet the appraisal value. However, if the seller is not willing to sell their home for less, then the transaction can come to a halt. Although it can be a difficult process, home sellers can challenge the appraisal with the help of their agent. They can also have a second appraisal done by a different professional if they feel the value given does not match up with what the home is really worth. The main downside to both of these options is the issue of timeframe. If a buyer isn’t willing to wait for a second opinion or for whatever tasks must be done in order to challenge the appraisal, they may decide to withdraw their offer and continue their home search.
The main thing all homeowners, buyers and sellers need to know about appraisals is that they are meant to reaffirm your contract and transaction.
When all goes as planned, the appraisal will become a small checkbox you have to go through in order to close on your home with confirmation that you aren’t overpaying or underselling it.
It is important to remember that appraisals are in your best interest and can only help you in the long run.
For more information on home appraisals, contact me today.
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Joy Muczko
As a full-time Realtor who has lived in Loudoun County for many years, I strive to provide the best possible outcome for all of my clients. After years working in the real estate industry as a service provider, salesperson specializing in New Construction, and investor, I took what I learned and brought it with me into my career as a full-time Realtor. With a focus on maximizing sales price for listings, new construction specialization, and negotiating aggressively for my clients, I work tirelessly until my clients are completely satisfied with their real estate experience. Beyond work, I enjoy spending time with my husband and children, playing tennis, gardening, and visiting all the great places that Northern Virginia has to offer. I truly love living here in Loudoun County and have a passion for helping people begin the next chapter of their lives.
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