What exactly is an appraisal? Simply put, it’s an estimate of the value of a property. Appraisals help to ensure that buyers and sellers are on the same page when it comes to the value of a property. Buyers need to be sure that they’re not paying more than the property is worth, and sellers need to be sure that they’re getting a fair price for their home. In this blog post, we’ll take a closer look at buyer appraisals and how they work.
What is a Real Estate Appraisal?
A real estate appraisal is an essential part of the homebuying process: it tells you how much a house is worth. It’s important information both for buyers and sellers, as value can vary greatly from neighborhood to neighborhood, city to city, and even street to street. When it comes time to purchase a property, an appraiser will assess several factors – such as location, size, amenities – and will determine the value of the home based on their findings. Knowing that value helps ensure a fair price so everyone involved gets what they expect out of the deal.
The Appraisal Process
Figuring out the value of a property is the goal when it comes to getting an appraisal done. The lender will order the appraisal, which means the seller and the buyer don’t get the luxury of choosing their own appraiser; the fate of their deal rests in the hands of someone else. Still, the whole process isn’t as daunting as one may think—the appraiser is there to assess the market for the exact type of property that you are buying or selling so you can make sure everything goes off without a hitch.
What Happens if the Property Doesn’t Appraise as High as Needed?
If you’re wondering “What happens if the property doesn’t appraise as high as needed?”, you’ll find that you have more than one option.Â
Firstly, a second appraisal can always be ordered. A different appraiser may value the property differently, and it won’t hurt to ask the lender to order a second one. If that doesn’t work, you can pay the difference in cash, the seller can agree to lower the purchase price to the appraised value, or you may unfortunately have to break the contract. It’s difficult to get into a good situation for everyone, but at least you have a few different ways you can hedge your bets and make it all work out.
Appraisals: Closing Thoughts
If you’re in the process of buying a home, it’s important to understand what real estate appraisals are and how they work. The process is relatively simple: an appraiser visits the property, looks at recent sales data for similar properties in the area, and gives their professional opinion on what the property is worth. However, if the appraisal comes back lower than the agreed-upon price between buyer and seller, it can create quite a stressful situation. In that case, it’s up to the buyer and seller to negotiate a new sale price based on the appraisal – no small feat! Hopefully this article has given you a better understanding of real estate appraisals and how they can impact your homebuying or selling journey.