Understanding the Basics of Appraisals

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A home appraisal is a step of the mortgage process when an unbiased state-licensed professional determines a home’s value based on size, condition, function, and the quality of the home. To do this the appraiser must first inspect the property. Then, by researching similar homes within the area and comparing recent residential sales, the appraiser will present their “opinion of value” with all supporting data and research used to come to their conclusion.

The appraisal process is important because mortgage lenders require an appraisal before they’ll provide a home buyer a loan. This is because the value of the property will likely determine how much a lender will lend. Lenders want to make sure that homeowners aren’t over borrowing because the home serves as collateral for the mortgage. So, if the borrower were to default on the mortgage and go into foreclosure, the lender would be able to get back the money they lent by selling the house.

If you’re a buyer, a home appraisal also can function as protection for the client too. If an appraisal comes in higher than the price being paid for the residence, than the borrower will have more home equity than initially expected. Also, an appraisal can help protect a client in keeping them from overpaying for a home, if the appraisal comes in lower than the asking price.

If you’re a seller, you want your home to be appraised for the amount you’ve listed it for.  In order for that to happen there are a few things you can do to impact that number. Clean, updated, well-maintained houses tend to receive higher appraisals. Make sure things like the home’s exterior and curb appeal is one that is eye catching, holes in the drywall are patched, and rug stains are cleaned can help. It’s also a good idea to provide your appraiser with a list of recent list of improvement you’ve made to the home as well as a list of attractive aspects about your neighborhood. Be sure to mention items like grocery stores, parks, and neighboring schools.

If you are unhappy with the appraisal, sometimes there is an option to appeal called “Reconsiderations of Value.” So, if there were enhancements made your home or recent comparable residential sales that happened the neighborhood to which wasn’t considered in the initial appraisal, it’s important to provide this information to your lender. Also, getting a second appraisal is always available to the buyer as well. Lastly, it’s important to add that an appraisal that was conducted beyond six month prior will likely be considered out of date by a lender.

Why You Should Consider Getting A Loan PreQualification

If you’re toying with the idea of buying a home, it is generally in your best interest to get pre-qualified for a mortgage. Working with a lender to see if you qualify for a mortgage can be an excellent first step to estimate the amount of money you can borrow, and what price range you can afford in a home. Getting an estimate from a lender is not binding, and does not mean you must use them for representation. If you are not satisfied with the quote you receive, you’re encouraged to move on to another bank and shop around until you have an understanding of the best options for you. Getting an estimate is often free of charge, and will help your real estate agent and lender get a better understanding of a good starting point for your home search. beacon hill home

What is used to determine your mortgage pre-qualification? Your finances, including your assets, income credit report, etc, will all be used to assess your rates. Having your pre-qualification in order before you embark on the home search is great in a hot market like Seattle’s, as this will give you a head start from other applicants, and proves to the seller that you are a serious buyer. If you are interested in search for a Seattle area home, contact your local real estate agent today.