A home appraisal is an important step in the mortgage process for both the buyer and the seller. Mortgage lenders will require an appraisal before they provide a home buyer a loan as the value of the property will determine how much the lender will approve.
The process will involve an unbiased, licensed professional being hired to determine the value of a home based on its size, quality, condition and function. The appraiser will inspect the property, research similar homes in the area, compare recent residential sales and present an “opinion” of its value using all the supporting data and research used to come to this conclusion.
Remember that an appraisal is only considered valid by a lender for a period of 6 months.
- If an appraisal comes in higher than the price being paid, the borrower will have more equity in the home than expected.
- An appraisal can also help protect a buyer from overpaying for the home if it comes in lower than the asking price.
An appraisal will confirm that a seller lists a home for its real worth. Some of the things a seller can do to guarantee a higher value are:
- Make sure the house is clean, updated and well-maintained.
- Ensure the exterior (curb appeal) is eye catching.
- Provide the appraiser a list of recent improvements to the home.
- Let the appraiser know about the appealing attributes of the neighbourhood like nearby grocery stores, parks and schools.
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