What is the Importance of the Appraisal Process?

Home appraisals are the perfect way to get an accurate measure of your house’s value. Now if you want to gain approval for a mortgage, you are going to need a good home appraisal.

From the seller right down to the buyer, an experienced real estate appraiser is an essential part of the overall home purchasing process. While a precise appraisal ensures lenders do not borrow more than what is necessary, it also safeguards novice homebuyers from overpaying when purchasing their dream house.

However, that is just the start of it! A precise appraisal is a critical step of the process regardless of whether you want to sell, buy, or refinance. Let’s discuss what an appraisal is and why it’s so important.

What is the Appraisal Process?
A home appraisal refers to an unbiased and accurate report of your home’s worth. It is conducted by a skilled and licensed appraiser boasting years of experience in the field. Here your appraiser considers a variety of different factors based on your house’s age.

In this process, a lender will request an appraiser through the appraisal management company. On the flip side, the borrower has to pay for the appraisal process, typically via credit card.

What Impacts a Home’s Value?
Your appraiser will inspect the inside and outside of your house by considering the following:

• Compare your property to similar ones recently sold in your neighborhood
• The age and condition of your house, as well as the materials utilized in the make and structure
• The location of your house alongside the view it offers and unique features
• The size of your home and property, its special features, and the number of bedrooms and baths
• Any substantial revamping and remodeling of any rooms
• Extra amenities like swimming pools, vinyl flooring, and so on
• An in-depth analysis of how the appraiser determined the value of the property

Why an Appraisal Is Important
Regardless of whether you are the borrower, the seller, or the lender, an appraisal of your building is an essential part of the process. Here we’ve rounded up a couple of reasons that show the importance of getting an appraisal:

Find the Accurate Value of Your House
The appraised value of your home is basically an unbiased and precise value. An accurate value of a house offers equal benefits for buyers, sellers, and lenders.

Where lenders can appreciate a great deal, vendors can make sure they’re selling the house for the proper price as well. Furthermore, buyers can purchase the house for a price that matches its worth.

For the Buyers
Prospective buyers will want to ensure they are purchasing a house for the appropriate price. An extensive appraisal allows them to rest assured they are not overspending on the home.

In this way, they can sift through a variety of similar homes to finalize their purchase without the fear of wasting money on a house that is not worth the price labeled on it.

For the Sellers
On the flip side, sellers can benefit from an accurate appraisal value to ensure they are offering a fair selling price on the property. Staying up-to-date with accurate selling prices in the market allows them to increase the cost of the house and therefore its value.

Moreover, they can pinpoint areas that can be refurbished in order to increase the value of the house.

For the Lenders
Last but not least, lenders i.e. the bank wants to ensure homeowners are not over borrowing. Thus, an in-depth analysis of the house allows lenders to find the accurate value of a home. In turn, they can make sure they are drafting the ideal contract with the buyer.

Knowing the precise value of the house allows lenders to gauge the risks of paying a certain fee. All in all, an adept and well-versed appraiser helps ensure you land on an accurate appraiser value and that no involved party has to deal with the repercussions of an unsuitable pricing.

To Ensure Appropriate Refinancing
Refinancing a conventional mortgage is impossible if your house boasts a low appraisal. Thus, with the help of a proper appraisal boasting a comprehensive report of your house, you can focus on areas that require improvements.

Ultimately renovating your home allows you to amplify your home’s worth.

Gaining a Home Equity Loan
Home equity loans are additional loans that you can receive alongside your current mortgage. The amount of home equity value you can gain largely relies on the quantity of equity left after subtracting the mortgage from your home’s current value.

Therefore, if your house’s value has downgraded, you’ll be deemed ineligible for gaining a home equity loan.

How to Boost Your Home’s Appraisal Value
In order to ensure you receive a good appraisal, it is vital your house boasts a beautiful look. Here we’ve compiled a list of time and cost-effective ways you can increase your home’s appraisal value:

• Cleaning up your house can include plastering cracks, remodeling water-stained walls, eradicating pests and persistent odors, and cleaning dirty carpeting.
• Typically, appraisers value houses depending on $500 increments. Therefore, repairs costing over $500 should be taken care of like leaky faucets, cracked windows, defective roofs, and so on.
• Enhance your curb appeal by eradicating overgrown landscaping and fixing broken garage doors. Spend some time making sure the exterior looks beautiful and attractive.
• Make a list of repairs you have made to your house in the past few years and the fee for each of them. Keep in mind the items that grab an appraiser’s attention such as insulation, kitchen cabinets, and so on.
• Positive changes in your neighborhood, be it the restoration of your roads or the establishment of a school, spike up your house’s value as well.
• Make your house look as new as possible. In fact, use carpets, revamp tiling, install clean windows, and such to boost your house’s look.

See our Appraisal Ordering Process page to learn more about this subject and how we incorporate our values and high standards into each valuation.