Are you buying a new home? Have you decided to refinance your current mortgage? In both of these cases, you will most likely encounter a home appraisal. Obtaining an appraisal is an important factor in the transaction between a home seller and a home buyer.
Understanding how the appraisal process works will help you with the home buying or selling process as well as refinancing. Dee Ayers is a mortgage broker who is here to help you understand what an appraisal is and how it comes to play in your specific circumstance.
What is an Appraisal?
To discover whether or not you need an appraisal, you must first learn what exactly an appraisal is. Simply put, an appraisal is a calculation of the believed value of a home. This calculation is done by an appraiser who has an unbiased and professional opinion. Appraisals are most commonly used in sales transactions between home buyers and sellers. Appraisals are also used in refinancing to assess the new value of your home.
One of the first steps to take when closing on a home is getting an appraisal. The process will continue depending on what the appraisal or decided value of the home turns out to be. For example, if the appraisal comes out to be the same or higher than the contract price, the agreement proceeds as planned. If, however, the appraisal is calculated as lower than the contract price, there might be a delay in the process since there needs to be a consensus on the home price. Although a delay can sound stressful, no one wants to pay more for a home than what it’s worth. An appraisal can help ensure that you are not overpaying for a home. In some cases, a second opinion is necessary if either party feels the amount calculated is inaccurate.
How is the amount determined?
An “appraiser” is the person who determines the appraisal amount. This individual is more often a state-licensed professional with the experience to compute property values based on location, amenities, and physical conditions. As explained before, there are some cases where a second opinion is needed. Buyers can see a lower appraisal as a positive, whereas, sellers can see it as a negative. A lower appraisal may mean a seller needs to lower the cost of the home in order to sell it. In this case scenario, the seller might opt to get a second opinion on the home and debate the true value of the home. Having a mortgage broker to help you through the process can help assess the accuracy of the appraisal and what next steps should be taken.
Why do you need one?
Appraisals are used when buying a new home using a mortgage or refinancing for homeowners. It is also used when sellers sell to anyone who is not an all-cash buyer. Besides assessing the accurate price of a home, the most common reason people require an appraisal is to obtain a loan. Appraisals are required for roughly all mortgage loans, making them important to have if you are buying a home. Apart from loans, having an appraisal helps with contesting high property taxes, insurance purposes, divorce settlements, estate settlements, lawsuits, and more.
Deciding whether or not you need an appraisal is an important process where a mortgage broker can help. Knowing your options is important with the home buying process and can make life easier for you. Partnering with an experienced and knowledgeable mortgage broker is the first step.
How Can We Help?
Dee Ayers is a mortgage broker with over 25 years of experience. Finding someone who understands appraisals will help you immensely in the home buying, home selling, and refinancing processes. Dee Ayers is here to help you not only through the appraisal but also through the next steps. Having someone there from start to finish will make all the difference and can change a stressful experience into a positive one.