Patrick Degnan's Blog
When you find a home that you love, you probably already have been pre-approved by a bank for a certain amount that will enable you to buy a home. Once you put in an offer on the home and it’s accepted, however, you may need to take a step back. The appraisal can help you to know what the value of the home actually is. The bank may decline your loan based on the appraisal This is one of the most important steps to obtaining the financing that you need to purchase a home.
What Is An Appraisal?
In a nutshell, an appraisal protects the bank from investing in a property that’s worth less than what they’re paying for it. This process also protects you as a buyer from buying a property that’s worth less than what you’re expecting it to be worth.
Although the appraisal makes sense financially, it doesn’t mean that the process won’t be emotional for you as a buyer and for the sellers as well. The appraisal can in fact make or break the purchase of what you consider as your dream home. There’s a lot of data that’s collected for the appraisal, which can cause nerves to be shot on both sides while the value of the home is being calculated.
What’s The Difference Between The Inspection And The Appraisal?
A home appraisal is much different than an inspection. The home inspection is important in its own right. As a buyer, you hire a home inspector to find any potential problems or hazards that could be big issues for you in the future as a homeowner. While property appraisers will make note of glaring issues, they won’t check out the nuts and bolts of the home like a home inspector will. The home inspector checks out everything from the air quality to the chimney to the toilet and sinks. There’s many things that will affect your home appraisal. In other words, if you’re a seller, you want to get major issues fixed before you put your home on the market. Home inspections will be very important for different reasons to you as a buyer since it will be valuable to you in the future. Appraisers may request an inspection if they notice something serious within the home, but they are more interested in the value of the property than the direct problems that are within the home.
Who Will Pay For The Appraisal?
Generally, the seller will pay for the home appraisal along with the closing costs. This can be a few hundred dollars. In certain circumstances the buyer may agree to pay for the appraisal, however.
What Goes Into Calculating The Worth Of A House?
Appraisers look at many different factors including:
- The square footage of the property
- The number of bedrooms
- How many bathrooms the home has
- The condition of the home
- How much have comparable properties have sold for in the area
- Safety issues
- Other factors pertaining to health and safety
The appraisal process can seem complicated, but once you’re educated on the matter, you’ll be prepared when it gets to that point in the home buying process.