Updated: Oct 17
Image via Pexels
If you’re familiar with real estate terminology, you’ve heard of appraisals. An appraisal is a way to determine the current value of houses or other properties. No matter what kind of real estate transaction you’re considering, getting an appraisal before you close the deal is vital. Read on to learn more from EXP Realty about home appraisals.
Why Is an Appraisal Important?
Performed by licensed professionals, appraisals protect mortgage lenders and buyers alike. Buyers don’t want to pay more than a property is worth, and lenders can’t fund mortgages for more than a home’s appraised value.
You’ll want a high appraisal amount for your house. The higher the appraised value, the more money you can get if you sell your home.
A high appraised value also benefits the homeowner if they want to refinance their home or apply for a home equity loan because they can borrow more money against the house. In addition, a higher home value may remove the requirement to have private mortgage insurance, which saves money.
What Do Appraisers Consider?
Your home’s value is based on several factors, including:
The number of bedrooms and bathrooms
Square footage of the house and lot
Basement, garage, or bonus areas
The amount of closet and other storage space
The overall housing market affects the value of your house; part of the appraisal process looks at the amounts that similar homes are selling for in your area. An appraisal is typically only valid for four months because the market can change quickly.
When Would You Need an Appraisal?
You’ll need an accurate appraisal if you’re buying or selling a home or property. However, there are a few other times that you’ll need an appraisal:
Applying for a home equity loan
Disputing tax assessments
Planning your estate or will
Filing for bankruptcy
Can You Raise Your Home’s Appraisal Value?
Realtors recommend a few simple things to increase your home’s value. These include:
Cleaning and clearing out clutter, inside and out
Making minor repairs
Remodeling or staging your home before the inspection
Replacing bold paint with neutral colors
Improving its curb appeal
If you renovate your home, it’s wise to choose projects that will provide a good return on your investment. A word of caution: an overly-personalized home renovation can decrease its value. Some examples of valuable improvements are:
Updating kitchens and bathrooms
Adding an outdoor living space
Choosing green and energy-efficient products when replacing or upgrading appliances or fixtures
What if a Home Appraises for Less Than Its Sale Price?
A buyer’s appraisal is performed while the sale is pending; at times, the appraised value is less than the agreed-upon sale price of the home. This can slow down the sale process by altering the math on the loan. A buyer’s first step is to renegotiate with the seller if that happens. If the seller agrees to a lower price, the buyer won’t pay too much, and they’ll be able to get a mortgage that covers the sale price.
If the seller refuses to accept a lower price, the buyer can usually cancel the contract if they choose. They might also have the option of making a larger down payment to get approval from their lender. An experienced real estate agent like John Trapaso Jr. with EXP Realty can be invaluable in these cases.
There can be times as a buyer that you want to get a ballpark estimate of a home’s value without going to the trouble of entering into a contract. Fortunately, you can get good estimated real estate values from tools online. An estimator will weigh multiple factors to determine a reasonable value for a given property. Eliminating some of the mystery of value can help alleviate the stress associated with entering the real estate market.
Are You Ready to Buy or Sell?
A professional appraisal should be a part of every real-estate deal, and there are also other times when one is required. A good real estate agent can make suggestions to improve your appraisal amount and help you throughout the process of buying or selling a home.
All real estate is local. In order to make confident real estate decisions, we believe it is important for you to have timely and neighborhood-specific information. If you would like more information about buying a home in NC, our experts at EXP Realty are here to help. Contact us today to speak with a EXP agent about buying homes or land in North Carolina.