A key element in buying a home is obtaining a real estate appraisal. If you’re a home buyer, an appraisal has the potential to save you thousands of dollars on a real estate purchase and sales contract. Here is why you need this valuable service.
What to Know About Real Estate Appraisals
What Is an Appraisal?
An appraisal is an unbiased evaluation and determination of the fair market value of a specific property. Appraisers are state-licensed professionals who make comprehensive inspections of properties and write reports giving their opinions of value. Their reports include photos of the subject property and of properties they use for comparisons.
When determining the value of a home, the appraiser considers numerous factors. Appraisers look at the size, age, and condition of the house’s exterior and interior, how many rooms and how much heated living space it has, and the neighborhood it’s in. Other considerations are property renovations, upgrades, and amenities. They also look at recent sales prices of similar homes around the neighborhood and whether there are upward or downward sales trends.
Why Do I Need One?
As a buyer, you want to ensure your offer is not more than what the appraiser determines the house is worth on the open market. If you’re taking out a mortgage, your lender requires an appraisal and bases the loan on the property value stated in the real estate appraisal report.
You reap a benefit if the report concludes the home you are buying is worth more than you agreed to pay because it provides instant equity. If the appraisal comes in lower than the agreed-upon price, try negotiating a lower purchase price. Real estate purchase and sales contracts often include an opt-out clause allowing buyers to end the agreement without losing their earnest money if the subject property does not appraise for the agreed-upon purchase price.
First time home buyers and seasoned commercial real estate owners trust the members of Galvin Realty Group Inc. to help close real estate deals in Monroe County, NY. As a well-established commercial real estate firm in Rochester, NY, they offer services including real estate appraisals by appraisers who are Members of the Appraisal Institute (MAI). Learn more about this real estate team’s background and services online. Call (585) 546-1290 to discuss your next purchase.