For both those looking to buy or sell a home in the near future, a vital part of the process to consider is the appraisal. Important for everything from understanding home value to moving forward with a mortgage lender in purchasing situations, home appraisals should not be overlooked during this process.
At Primary Residential Mortgage, we’ll be happy to explain the appraisal process and why it’s important as you apply for any of our quality mortgage loans, from FHA home loans for first-time buyers to conventional loans, reverse mortgages and refinancing options. Here’s a primer on what an appraisal is, how it benefits the buyer and seller alike, and the factors appraisers are considering during their inspections.
An appraisal refers to a basic inspection and assessment of the home that’s carried out by a third-party in advance of a sale. This third party is known as the appraiser, and their goal is to move through various areas of the home, both interior and exterior, to determine its fair market value based on its condition, appliances and numerous other factors.
In nearly all cases, lenders will not consider loaning money for a mortgage without an appraisal done on the home that’s desired for purchase. This allows the lender to be sure on the value of the home before lending money. In most cases, the seller of the home will pay for the appraisal, though this may vary in certain situations.
As a buyer, even though you don’t usually pay for the appraisal, it holds major potential benefits for you. The first is helping you know if you’re getting a good deal – if the seller is asking a number that’s $100,000 higher than the appraised value, they’ll have very little leg to stand on when you ask them to consider a more reasonable price.
These same benefits can apply to sellers as well: They can list a reasonable asking price with an appraised value of their home, rather than guessing at the value and risking selling for too little or turning off buyers by pricing a home far too high.
Here are some of the top factors appraisers are considering when they inspect your home:
For more on the appraisal process and why it’s important during a mortgage application, or to learn about any of our home loan programs, speak to the staff at Primary Residential Mortgage in Fort Myers today.
*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.