Whether you are a person buying a house or selling one, you will need an appraisal for the house. The appraisal is something that reveals the actual market value of the home you are buying or selling, and it is something that is mandatory in most real estate deals. As you proceed with buying or selling, here are several things to understand about the appraisal, the importance of it, and the effects it may have on the deal.
It bases the amount on the current market
The first thing to know is that while appraisals are based on the current market conditions, it takes time for them to catch up. For an appraisal to be completed, the appraiser looks for similar single family home listings to compare to yours, and the homes selected must have sold within recent times, such as six months. If the market was not as hot six months ago as it is now, and yet the appraiser uses houses that sold six months ago, the appraisal of your home might not come back as high as it should. This is normal, and there is nothing you can do to change it. You can request that the appraiser looks for homes that sold more recently, though, if there are any that are similar to yours. If so, this could help increase the amount of your home value stated on the appraisal.
The problems that can occur when it is too low
The reason you would want the appraisal high, whether it be as a seller or a buyer, is to ensure that the deal goes through. From a buyer's perspective, there could be problems getting the loan if the amount stated on the appraisal is not as high as the offer amount you made. As the seller, you could lose the deal if the appraisal is not high enough.
The benefits of a high appraisal
When an appraisal is high, it makes the buyer feel better about the deal, as he or she will know that the house is worth the price he or she is paying. For the seller, it simply makes the transaction run smoother when the appraisal is high.
Appraisals are a normal part of real estate deals, and they can have positive or negative effects. If you have questions about buying or selling a house and the appraisal you may need, contact a real estate agency.