Once you find the perfect property to make your new home, schedule a residential real estate appraisal. Knowing the house’s true market value will help you secure financing to complete the transaction. To understand why you shouldn’t skip this step of the house-buying process, learn more about appraisals below.

Why a House Real Estate Appraisal Is Important

Getting the house appraised is the final stage of the mortgage approval process. The lender will conduct a thorough valuation, where a licensed appraiser determines the market value based on the real estate in the area, the value of similar properties, any flaws or other concerns that affect value, and the neighborhood.

The information is presented to the lender and home buyer in a report. With it, the lender decides how much money to give for the mortgage loan. You’ll also have a better idea of whether the house is worth the asking price and how high property taxes will be. 

Different Appraisal Methods

With the sales comparison appraisal method, a qualified appraiser will compare the property to similar real estate sold in the community. They will make modifications to account for any differences in property features. The comparison chart gives an idea of how much the other properties would have sold for if they were exactly the same as the house you plan to buy.

If you’re buying a newly built property, an appraiser might use the cost approach method to valuate the house. This entails determining reconstruction costs if the house needed to be rebuilt from scratch. 

If you plan to buy a home on Maui, contact the professionals at Classic Maui Properties in Pukalani. Providing residential real estate appraisals since 1970 and a member of the National Association of Realtors for over 40 years, the team has the credibility and experience to determine the true value of properties throughout the community. For real estate services, call (808) 878-1001. Learn more about the property managers and licensed realtors online.