If you're thinking about buying a house, your mind is usually focused on how much storage space it has, the number of bedrooms, and total square footage. Few people will automatically think in terms of the home appraisal.
On the other hand, if you're looking to sell your home, you're already thinking about what you want in your new home and you're interested in how much money your present home will sell for so you can buy your next house.
The reality is that whether you're selling or buying, home appraisals are not high up on the list of things you want to talk about. It's the least romantic part of the real estate business. But, without a good home appraisal value it would be difficult to get a loan, an important factor that could make or break your decision to buy.
Appraisals Have Value:
While a home appraisal is just an educated guess as to how much a particular piece of property is worth, without it the majority of homebuyers today would not be able to get into their home. They are not only used by financial institutions to determine if they will lend the money for the home but they can benefit you by telling you if the seller is trying to sell the property at a highly inflated price. To that end, a good home appraisal could keep you from throwing your money away on a poor investment.
Factors Considered in a Home Appraisal:
When appraisers walk through your property, they are looking at specific characteristics to determine the true home appraisal value. They will look at the obvious; the square footage, number and size of rooms, number of bathrooms, and the condition of the home. They will also take that information and do a comparison of recently sold properties in the area to come up with a final figure. Good appraisers will also evaluate less obvious factors such as the safety of the community where the property is located and the overall health of the surrounding neighborhoods. These and other factors will be analyzed and weighed carefully to determine what is the potential value of your home or the home you're considering purchasing.
Appraisals vs. Inspections:
While the two may seem like the same thing, there is a distinct difference between an appraisal and an inspection. They both will do a walkthrough of the home but for different purposes. The appraiser will be looking to determine the value of the home while the inspector will looking for defects that could cause you problems in the future.
Whether you're buying a home or selling it, getting a good home appraisal value can be important to you. Since most people cannot afford to pay cash outright for their home, it is a valuable tool in the real estate industry. No matter who you are or what you hope to accomplish, the home appraisal can be key to all parties involved. It can keep a buyer from paying too much for a home, it can help a seller to decide on the sale price, and it can let a financial institution know if the investment is worth their while. Home appraisals make it a win for everybody concerned.