Home Appraisal 101: What Sellers Need to Know
Home appraisals are a major part of buying and selling a home. Both buyers and sellers will have a sincere interest in the result of the appraisal. An appraisal should only be done by an unbiased professional who is qualified to determine the true value of a house. As a home seller, you may be nervous about how much the home appraisal will affect your bottom line.
Home appraisals don’t have to be intimidating or difficult, though. The appraisal needs to reveal that your property is worth what the buyer is paying for it. Your appraisal can actually be a tool you can utilize to sell your home. The more information you know about the process, the more effectively you can prepare for the appraisal.
The Lender Orders the Appraisal
Although there are exceptions to the norm, it’s the potential buyer’s lender who typically orders the appraisal of the home. Although you are certainly welcome to hire your own independent appraiser, the lender will work with their hired appraiser to determine the worth of your property.
FHA Loans Have Additional Appraisal Requirements
If you are trying to sell your home to a buyer who is acquiring an FHA loan to purchase the property, the guidelines for the sale are a bit more complex. Your house must pass the inspection and appraisal from the FHA. In addition to showing that the purchase price is justified by the true value of the home, the appraiser will evaluate many other aspects of the house.
The FHA inspection will assess whether your home has an effective heating system that meets specific criteria and that it offers basics such as electricity and drinking water that meets certain quality standards. The FHA inspection also determines whether the home has basic things such as a stable roof and that the home is structurally sound.
Your Appraisal Won’t Be Valid Forever
The value of your home may fluctuate a lot from year to year. That means that the appraisal will differ a lot. The appraisal isn’t only about how well-kept, large, and elaborate your property is. The appraisal also factors in things such as current trends on the real estate market. If a similar house has sold for a lot in your neighborhood, that’s a good sign.
If you feel that your property should be worth more based on its size and features, you may opt to hang on to it if the appraisal is far away from how much you envision your property being worth. Depending on where you live and what happens with the housing market, you may make more money in the long run by holding on to a property that is appraised for a low selling price.
The Buyer May Be Worried About the Appraisal
If the appraisal on your home reveals that it is worth a lower price than the one that you and the buyer have agreed upon, that can be bad news for both parties. A lender isn’t likely to approve a mortgage for amount that’s higher than what the appraisal says the home is worth. No bank or mortgage company will want to take such a big risk.
If the home buyer is nervous and tries to sway you to go with a certain appraiser or otherwise try to bend the rules for a favorable outcome, refuse to engage in such conversations. Although you and the home buyer may ultimately both like or dislike a certain appraisal, this is an aspect of the home selling process that is beyond your control.
Don’t Sweat the Small Stuff When Preparing for an Appraisal
A lot of home sellers run themselves ragged trying to give their home a makeover before a house appraisal. However, that is not a good idea. The home appraiser isn’t going to be looking at stuff like how clean your counter is. A home appraiser looks at things like square footage and lot size.
Finally, when you want to put your home for sale in the greater Norristown area, contact Charles L. Moles Real Estate LLC today for help from our caring, service-oriented team.