What is an Appraised Value?
Everyone wants to sell their house for more than they bought it for, but real estate is trickier than that. Markets change, and home values change right along with them. Fortunately, there are licensed professionals called appraisers who will come to your home, do the relevant research and come up with a number known as the appraised value.
What is an appraisal?
An appraisal is an estimate of how much money your property is worth. It is not a constant number, and changes depending on current market conditions. Homeowners sometimes confuse the appraisal for a home inspection. A home inspector makes a list of things that need to be fixed in the home. An appraiser, on the other hand, looks at a home’s location, size, and overall condition, and then compares it to similar homes in the market to see what they have recently sold for.
Why do I need an appraisal?
Sellers can use appraised value to determine how much to list their home for. Lenders use it to determine how much to loan a borrower. Banks obviously don’t want to pay more than the house is worth. If an appraised value is determined to be lower than the asking price, buyers are able to use the number to ensure they aren’t overpaying.
How do I get an appraisal?
According to Home Advisor, the national average cost for an appraisal is $332. It is usually up to the borrower to pay for it, but most lenders already have an appraiser they consistently work with and can order the appraisal for you.
Can I do anything to ensure a high appraised value?
Since it is an objective opinion of value, there are a few things a seller can do to improve a home appraisal. Here are a few things sellers can do ahead of time:
- Even though appearances can be deceiving, cleanliness is one way to create the best vibes possible in your house.
- Appraisers will scope out how your home compares to the others in your neighborhood. Having cut grass and trimmed hedges — generally making sure your home isn’t the eyesore of the block — is an easy, worthwhile practice.
- List Improvements. To ensure nothing is overlooked, have a list ready of any improvements you’ve made to the house, and when. List things like new appliances, a bath remodel, roof replacement, etc.
What if I still get a low appraisal?
A buyer has every right to back out of a sale because of a low appraisal. They may also use it as a bargaining tool to negotiate a lower asking price. Sellers should look into why the appraisal came back low, and challenge it with the lender. Obtain a copy of the appraisal, then:
- Look for mistakes. Go over the appraisal with your real estate agent and identify any mistakes, such as the wrong square footage or the number of bathrooms.
- Look for inaccurate comparisons. Your property may be being compared to homes that are the same age and size but are in a much pricier neighborhood. The appraiser may be using outdated sales numbers.
- Petition for a new appraisal. Bring your argument to the lender and see if they will consider a new appraisal, possibly even with a new appraiser.
If nobody will budge and the low appraisal stands, the best outcome would be if the seller reduces the price and the buyer comes up with some additional money. Otherwise, the deal may fall through. A Lennar Mortgage lender can help you get started on discovering how much your property is currently worth. Speak to an Lennar Mortgage lender today for more information on home appraisals.