Home buyers usually cannot secure financing through traditional means without first providing an official home inspection on the dwelling they wish to purchase. Home appraisals help banks determine that the home is actually valued correctly and that the price has not been falsely inflated. This means that any serious buyers, or their lenders, will be sending in certified home appraisers, and these individuals have substantial power concerning the valuation of your home and its ability to sell.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

Home Inspections Differ From Home Appraisals

Both home appraisers and home inspectors spend time investigating the condition of the home. However, these professionals have different purposes and end goals. Inspectors primarily evaluate the home’s interior and exterior elements to point out critical issues and defects. Appraisers will be looking for many of the same elements in addition to demographic and market information but with the goal of determining the home’s monetary value.

Home Appraisers Look for Key Characteristics

Most appraisers utilize a form known as the Uniform Residential Appraisal Report when they survey single-family dwellings. The checklist is very detailed and specific and addresses both interior and exterior home conditions. Anything that is in disrepair, is non-functional, or adversely affects the overall property value will be noted. Additionally, it is important to make appraisers aware of any improvements or additions that have been made to the home that can boost value.

Appraisals Dictate the Price Point for Homes

Home appraisers are not only skilled at inspecting a home, but they also have experience within the local housing market and demographic factors that also help determine the dwelling’s value. These individuals must be certified and/or licensed and will submit a thorough report to the requesting party (typically the buyer or bank) outlining their findings and explaining their valuation of the Maple Grove home. Because they are professionals, an appraisers assessment is typically considered credible.

Sellers Can Use Appraisals to Increase Home Valuations

Sellers are not wholly powerless of the results of their appraisals. For starters, they can opt to fix any problem issues they already know exist prior to the appraisal process. Second, sellers can utilize notes on any appraisals performed in effort to improve the condition of the property and elevate the valuation. Key areas such as siding, foundations, electrical, plumbing and HVAC can be serious issues for potential buyers, who may want to request contract contingencies to cover the cost of repairs or replacement for defective or damaged home implements.

One Home Appraisal Does Not Have to Be the ‘End All’

Appraisals are occasionally fallible and may come back boasting a lower valuation that a seller or their real estate professional has estimated. This sometimes happens in hot markets or sellers markets. While most home appraisals are fairly accurate, there could be some red flags that sellers and agents can take action on in order to avoid being hit with a low home appraisal. Occasionally, an appraiser may miss an upgrade or simply be unfamiliar with the local market. Whatever the case, there are certain actions that can be taken to contest inaccuracies on a home appraisal. However, this may be something best addressed by the real estate agent or lender handling the home sale.

Home appraisals are an important step when buying a home with a mortgage. A real estate professional who has the experience and knowledge can help sellers and buyers navigate the appraisal of a home.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.