Getting a Property Appraisal: Yes or No?
A common question we are asked is whether or not – and when – you should have a property appraisal done.
If you’re buying a home, determining the property value of a home is a key factor in getting a mortgage. A property’s value is determined by a number of things, including square footage, the home’s age, where it’s located, how it’s built, and even the number of bathrooms.
Keep in mind that the value of a property is not a fixed number, rather it’s a snapshot of what the home is worth today, in relation to current market conditions and what other similar properties are selling for.
When applying for a mortgage, you’ll be asked a series of questions to help determine the property’s value and mortgage professionals can often get a ballpark idea of the home’s value just by knowing the address. But often a professional appraisal is needed for a more in-depth assessment of the property’s value. Even if it’s not, for your own peace of mind, getting an appraisal is a good idea.
An appraisal is not the same thing as a home inspection.
An appraisal is an assessment of the property’s physical and functional characteristics, a detailed comparison of the home to recent comparable sales in nearby areas, and an assessment of current market conditions affecting the property, all to determine its value.
A home inspection, on the other hand, determines the condition of a home’s major systems, such as mechanical, electrical, plumbing, windows, roof, and points out any deficiencies based on a visual inspection of the property inside and out.
An appraisal should be done by an impartial, qualified third party after your offer is accepted and before you sign off on a financing condition to make sure everything is good to go so that you can firm up the deal with confidence.
Should you get an appraisal if you’re selling?
It’s not required, but getting one can help you determine your asking price (although your agent can do that, too). And making that appraisal available to a buyer is a signal of your honesty and willingness to remove obstacles to a sale that might just be what a buyer needs to make an offer.
Appraisals, which typically cost around $500 or less, should be done by a professional.
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