Are you planning to buy or sell a residential property? In any case, do you wish to get the best deals while buying or selling the property? If yes, it is time for you to understand the importance of residential appraisals and hope they can bring out the true worth of your property. Keep reading to have a deep insight.
Table of Contents
What is a real estate appraisal?
A real estate appraisal is a process that determines the true worth of the property in accordance with the existing market situation. This unbiased process is beneficial for both the buyers and sellers. The buyers can learn the worth of the property considering the current financial market, and the buyer has the peace of mind that they are not paying more than the property’s actual worth. Through residential appraisals, both the buying party, selling party, and the bank can arrive at a contract price that is fair for everybody. A systematic approach is followed to carry out the appraisal process. It includes gathering information about the property’s actual worth by considering the condition of the space and the amenities in and around it.
How is the property examined during the appraisal process?
The appraisers are professional and certified experts sent by the bank for residential evaluation and to prepare an appraisal report. Here are a few factors that are essentially examined:
- Size of the property
- How old is the property
- Location of the property
- Structural status and issues
- Quality of construction
- Requirement of renovation
- Market trends and prices of similar property
- Surrounding area
- Current value of the property
- Scope of improvement
- Expected life spans for depreciation of the property
- Rental price
The general maintenance and tidiness of the property also play a major role in increasing the property’s worth. Thus showcasing the property in a tidy manner reflects on its structure, and the same will reflect when the appraiser attaches a value to the property.
Who bears the cost of property appraisal?
The lending institutions hire independent and recognised property appraisers to conduct the home appraisal process. Usually, the buyer of the property is made to bear the appraisal cost while the home loan application is processed.
Can the appraisal process impact home loan applications?
On the basis of the value of the property after appraisal, the banks decide to lend you a certain percentage of the property’s worth as a home loan. The loan to value ratio and the credibility of the borrower is also taken into consideration to determine whether the borrower will be able to repay or not. Usually, up to 80% of the property’s value is provided as a home loan amount, and the remaining amount has to be arranged by the borrower from other sources.
The residential appraisals help home buyers to avoid paying more than the actual value of the property. The financial institutions evaluate the property’s value in a rational and unbiased manner so that both the involved parties get true justice while buying or selling the residential space. Hire an experienced appraiser for conducting the appraisal process of a residential real estate property.
