Anytime you purchase a new home or refinance a current home, your lender may require a real estate appraisal. During an appraisal, professional property inspectors walk through your home and yard to collect vital information for their report. Here are three things that real estate appraisal will tell you, and how the information can help.
1. Comparable Homes In Your Area
As part of your home appraisal, professional inspectors will do a lot of research about the other homes in your area to determine if your home is an outlier. If your home is in a nice part of town, the sales values of other houses in the area can boost your own home value. On the other hand, if your house is the nicest one in the area, the other home values can drive the price of your home down.
The comparable properties in the area will be listed on your home appraisal, so you have the chance to understand the value of your home and what it entails.
2. Upgrades You Should Consider
As part of your appraisal, the appraiser will make very general notes about the condition inside your home. For instance, they might mention that you need new paint on the walls or new carpeting, which can help you to determine what you need to do to justify the sales price you are thinking about. For instance, if you are refinancing but plan to continue living in the house, you might decide to change out the carpet in your home to boost the sales price if you do ever decide to sell.
3. Suggested Sales Price
Real estate appraisals are designed to give you detailed information about the projected sales price for a home. For instance, while you may consider your home to be very valuable, your real estate appraisal might determine that your place is worth several thousand dollars less than you were expecting. On the other hand, appraisals could come in high, prompting you to raise the sales price of your home and get more for your listing. Having this information is critical, so pay attention to your final appraisal report.
Remember, with the knowledge, you will glean from working with a real estate appraiser, you can learn a lot about your home and everything you need to do to get it listed or refinanced. While it can be intimidating to get everything in your home put together and looking great, investing your time can really help you to prevent snags during the transaction process.