5 FAQs and Answers About Home Appraisals

You can’t buy or sell a home without an appraisal. But what is an appraisal? And how do appraisals impact the buying and selling process? The short answer is that appraisals are an important step in both processes. To help you figure out the answers to these and other questions, review this guide for both sellers and buyers. 

What Is An Appraisal Anyways? 

Whether you’re buying or selling, you may be asking yourself this question. That’s because although the term “appraisal” gets tossed around in the real estate world, a lot of folks aren’t sure exactly what it means. When an appraisal is ordered, a licensed appraiser will compare the home to recently sold properties in the same neighborhood. Then he/she will provide an opinion of what that home’s value is in relation to those recently sold properties. 

Are Online Appraisals Accurate? 

That explanation is still a bit technical. But the most important thing you need to know about the appraisal process is that an accurate figure can only come from a licensed or certified appraiser. There’s a lot of information and detail that goes into a professional appraisal and there’s no way for an online appraisal to be anywhere near as accurate. You can use online calculators as a baseline, but try not to get your hopes up based on them. 

Should the Listing Price Equal the Appraisal? 

If you’re a seller, keep in mind that an appraisal is just a starting point when it comes to pricing your home. Whether you price your home higher or lower will depend on current conditions. Currently, the housing market is still going strong and tends to favor sellers. This means that if you are selling your home right now, you may be able to set a higher price. Work with your real estate agent and take care not to price it too high. That’s a common mistake sellers make and could put your sale in jeopardy altogether. 

Can Sellers Do Anything to Boost Appraisal Value? 

If you have your home appraised and the price seems too low, you can always make improvements to increase the value. If you’re looking to make those updates on a budget, DIY projects could be the way to go. Give your walls a fresh coat of paint and work on boosting your property’s curb appeal. If your backyard could use some sprucing up, connect with highly rated backyard landscaping services to give your yard the ultimate makeover. Adding a smart security system can also be a boon, whether you do it yourself or work with a service for installation. 

Even if these changes don’t result in a huge increase in your home value, they are guaranteed to attract the attention of more potential buyers. If you have more room in your budget, you can also consider more extensive renovations like a kitchen or bath remodel. 

What Should Buyers Know About Appraisals? 

For those who are buying a home, understanding the appraisal process can be even more important. When you apply for a home loan, your lender will request an appraisal to ensure that the home’s price isn’t too far above the appraisal. When the home is valued under the asking price, you will have to make one of three choices. You can try to renegotiate the price, come up with the difference on your own, or walk away from the sale. Honestly, this is why setting a higher price is rarely a good idea for motivated sellers. 

Appraisals can be complex and confusing for both buyers and sellers. But they are an essential part of each process. You need an accurate appraisal to price your current home correctly or secure a sufficient loan for your new home. Hopefully, this guide answered some of your questions, but keep in mind that no amount of online advice will replace the experience and knowledge of a seasoned appraiser. 

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