Whether you are buying or selling a home, an appraisal is a vital part of the process. But how does it work? Here are answers to some frequently asked questions, from U.S. News & World Report.
What is a home appraisal?
It’s a “very educated” guess of how much your property is worth in the current market.
Why is it important?
No credible financial institution will lend you money without one, because the appraisal tells the bank how much the house would sell for if, in worst-case scenario, the bank ends up owning the house.
Who pays for it?
In Palm Beach County the buyer pays for the appraisal. HomeAdvisor.com estimates the national average cost is $309
How do appraisals differ from home inspections?
The appraiser is looking for the value of the home, while an inspector is looking for defects in the home that could cost money to fix down the road.
How long does the process take?
It used to take a couple days, but changes in federal guidelines after the recession have increased the time to a week or more – because underwriters can request more information about the house than they could before.
Why can it sometimes be a tense undertaking?
The appraisal is usually conducted after the purchase price has been negotiated between the two parties and a contract has been signed. So if the appraised price comes in significantly different than the agreed-upon price, it could cause complications with the purchase.
What does the appraiser look at when deciding the worth of a house?
Many factors go into the decision, including square footage, number of bedrooms and bathrooms, condition of the home, health and safety issues, and current recently sold comparables or “comps” (houses similar to the one for sale).
What can a homeowner do to help the process go smoothly?
There’s not much a homeowner can do, except make the property look as good as it possibly can. Mow the grass, weed the garden , trim the bushes, clean the house, open the curtains, and turn the lights on. Also, provide the appraiser with a list of any significant repairs or improvements that have been made to the house in the last several years, such as a new hot water heater or recently refinished hardwoods.
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