Is Your Home Worth It? Why You Need this Valuable Home Appraisal Information

You don’t have to be a first-time homebuyer to be confused about the many parts of the home sale process. It can be hard enough to gain mortgage pre-approval, find a home that meets your needs and wants, make an offer and have it accepted. And, that’s just the beginning!

Then, there are all of the parts of the closing process that come into play. Today, we’re breaking down just one part of the closing process: home appraisals. They’re pretty much a standard when it comes to buying or selling a home; but, do you even know what they are or how they can affect the home sale process?

By definition, a home appraisal is an impartial, certified professional’s opinion of what a home is worth. Typically, the home appraisal is required by the lender to ensure a home’s sales price is appropriate. For good reason, a lender does not want to give a borrower more money than a home is worth; and, frankly, borrowers do not want to pay more than a home is worth.

So, after a buyer and seller agree on a home’s contract price, the lender sends a home appraiser to visually inspect a home inside and out. They note overall condition, amenities, square footage, number of bedrooms and bathrooms, layout, needed repairs and yes, pretty much every other little detail, too! Home appraisers also take into account the neighborhood, comparable nearby sales and current real estate market trends. With all of that information, they make an assessment of a home’s value.

But, home appraisers do not simply come back with a number. They’re required to back up their assessment with an appraisal report that includes exterior photos, street maps, property details and comparable sale information. With all of that work involved, it should come as no surprise that an appraisal can take up to a few weeks to complete. It also should not be too surprising that appraisal costs can reach hundreds of dollars, which are usually paid at the closing table.

So… that is what a home appraisal is. Here’s where it packs the power!

If a home is appraised for equal to or more than a sales contract price, closing proceeds uninterrupted. However, if a home is appraised for less than the contract price, the closing process can be delayed or it can come to a complete halt until the contracted price is adjusted or the borrower puts up the cash to cover the difference between the contracted price and the appraised value.  

Obviously, homeowners want to do everything they can to ensure their home is appraised at or above their asking price. Though they don’t play a role in the home appraisal process once it has gotten started, there are some things that homeowners can do beforehand to boost their chances of impressing a home appraiser:

• Appearance is everything! If comparable home sale prices are similar to a homeowner’s asking price, the best thing they can do to make sure their home conforms to those prices is to make it as clean and well-manicured as possible. That means mowing the lawn, clearing the sidewalks and trimming shrubbery outside. It also means thoroughly cleaning inside to make sure the home is tidy and well-lit when it is time for the appraisal.

   

• In addition to making a home appear as clean and well-taken-care-of as possible, homeowners can arm home appraisers with more information about any enhancements, improvements or recent home repairs they’ve completed. Owners can leave a list of enhancements for appraisers to illustrate ways they’ve added to the home’s worth. When it comes to home value, the more information a home appraiser has, the better!

Certainly, home appraisals are an important part of the home sale process. But, we all know that they’re just one part of the closing process. After a buyer and seller get past the home appraisal, there are walk-throughs, inspections and all of those signatures to get through before home keys exchange hands.

For more help understanding home appraisals or any part of the closing process, contact a Berkshire Hathaway HomeServices The Preferred Realty agent today!