Whether you’re buying a new home for your primary residence, planning to purchase a commercial property, or selling your current house, it’s best to understand every step of the real estate transaction process. If you’re investing in a space for your business, you may want to request a business valuation through Sofer Advisors first.
But no matter your reason for buying property, the appraisal is crucial. An appraisal involves a licensed appraiser estimating the property’s market value, based on the condition of the home and comparable home sales in the area. It’s time to break down the importance of appraisals and why this information benefits both buyers and sellers.
When Do You Need an Appraisal?
Appraisals are essential for all kinds of real estate transactions. For instance, when someone is buying a residential property, their lender will send an appraiser to the property to ensure that the buyer will not be borrowing more than the actual value of the home. But an appraisal could also be carried out for a commercial property purchase. Furthermore, one might need to have their home appraised for estate purposes or home refinancing.
An appraisal reveals a more accurate picture of a property’s value. This is because the appraiser looks at the property itself as well as the surrounding area. In addition to unique features or obvious flaws within the home, they will carefully consider the final sales prices of similar homes nearby. While it can be hard for the average person to see the true value of a particular property, appraisers are qualified professionals who know which factors to weigh.
Yes, hiring a great real estate agent can help buyers make smart investments, but the information provided by the appraiser can also help buyers save money in the long run. If you’re purchasing a home and the appraiser determines that the property is valued for less than the final sale price, you might be able to renegotiate with the seller for a lower price.
In case the seller decides against lowering the price, the buyer’s lender may request that the buyer contributes more money towards the down payment to make up the difference. Should the buyer decide that this would not be a sound purchase, SFGate states that you may have to sacrifice your liquidated damages deposit.
Preparation for Sellers
Sellers benefit from the appraisal as well — knowing that an appraiser will be carefully evaluating every aspect of their property should prompt sellers to invest in home improvement projects and minor repairs. By taking steps to address any flaws that appraisers might notice in advance, a seller can raise their asking price and make their home more attractive for buyers. Property Club states that sellers should consider finishing their basements, updating their heating and cooling systems, and upgrading their kitchen appliances for better appraisal results.
Deciding to Refinance
If you’re already a homeowner, and you’re thinking about refinancing your mortgage, you’ll also need to go through the appraisal process. The appraisal determines how much the bank will lend you. It can seem like an inconvenience, but this will protect you from borrowing more than you can realistically afford. It is beneficial for both the refinancer and the lender.
When you’re buying or selling property, you may already be feeling impatient by the time you schedule the appraisal. But this step is key to ensure that everyone is getting a fair deal! Whenever you’re involved in a real estate transaction, an appraisal is essential to protect everyone’s interests.
Are you seeking professional business valuation services for your company? Look no further than the experts at Sofer Advisors. Contact us today for your free consultation!
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Article written by Ted James. Ted can be reached at email@example.com