Whether you’re buying or selling a home, the sales price is a critical component of real estate. Buyers want to get the best deal possible, and sellers want to make a good profit off their home without listing it at a price so high that it turns potential buyers away. This is where a home appraisal comes in handy. Having a home appraised takes the guesswork out of determining its market value to make sure that both parties walk away from the deal satisfied.
What is a home appraisal?
A home appraisal is a method of finding a home’s value according to the opinion of a licensed appraiser. The appraiser serves as a neutral, unbiased party. While home appraisals are not always legally required, most buyers will not be able to take out a home loan if the property hasn’t been appraised first, so an appraisal will almost certainly take place at some point in the home sale process.
Is a home appraisal the same as a home inspection?
A home appraisal differs from a home inspection. While an appraiser determines the fair market value of a home based on easily observable information and local real estate statistics, an inspector specifically looks for anything in a home that is in need of repair so they can report this information back to the buyer. Home inspections are typically optional, but be aware that most buyers will not buy a home without one.
What is the cost of a home appraisal?
In the state of Oklahoma, we are currently seeing home appraisal prices range from $525 to $725. The price of an appraisal is decided based on a variety of factors including the size of the property, where the property is located, what kind of condition the property is in, and whether it is a single-family or multi-family property. As a general rule, the more effort an appraiser has to put into appraising a property, the more it will cost.
Aside from these variables, the cost of a home appraisal will incorporate expenses mandated by the government. This includes the cost of an Appraisal Management Company, also known as an AMC. Mortgage lenders are required to ensure that appraisers are engaged independently and not unduly influenced. The use of AMCs fulfills this requirement but also increases costs.
How does the home appraisal process work?
Most appraisers use a Fannie Mae form known as the Uniform Residential Appraisal Report to find a home’s value. The appraiser examines the interior and exterior of the property and documents its status in the form of writing, photos, and sketches. The report not only includes facts about the property itself—such as layout, square footage, and obvious damage—but also statistics about the area as a whole. The appraisal itself can last anywhere from 15 minutes to more than 3 hours, and the appraiser typically finishes compiling their report within 10 days.
What should sellers keep in mind?
As a seller, there are some steps you can take to make sure your home passes appraisal, as a low appraised value may result in buyers backing out. Thoroughly cleaning your home, adding appealing decor inside and outside, and making minor repairs all make the property appear more valuable. You may also want to research details on other homes in the area and highlight any features your home has that makes it stand out positively in comparison.
What should buyers keep in mind?
As a buyer, you don’t have any control over how an appraisal ends up, but it’s up to you how you respond to the results. If the home’s appraised value is the same as the selling price that was previously agreed upon, or even better, higher, you can proceed to buy the home as planned. If the appraised value is lower than the selling price, you have a few different options. You can negotiate with the seller to buy the home at a lower price, pay the difference out of pocket, or simply take it as a sign that the home isn’t right for you and look for a different property to purchase.
Are you ready for a home appraisal?
Whether you’re buying or selling, knowing what to expect in a home appraisal and planning accordingly makes the whole process go a lot more smoothly. If you’re looking for advice as you prepare for a home appraisal, the loan specialists at Cross Timbers Mortgage can provide their expert guidance.