What is a Home Appraisal and Why Do Home Buyers Need One?

A home appraisal is an independent, unbiased and certified assessment of the value of a home. This process is a requirement when buying, selling, or refinancing a home and is carried out by a licensed appraiser. Today, we will talk about the top three reasons why home buyers need an appraisal:

Avoid Paying More Than the Home’s Value

Sometimes, home sellers might quote property values that are too high and not worth the current market value. Fortunately, an appraisal gives you the actual value of the property and helps in determining whether the home’s selling price is suitable based on the features, condition, and location. Hence, you’ll avoid paying more than the home is worth if there’s a discrepancy between what the seller is demanding and what the market value is.

Helps in Negotiation

According to the NAR, 76% of sales closings will have contract contingencies, 43% of which pertain to getting an acceptable appraisal. That means if the appraisal comes in lower than expected, you can negotiate for a lower selling price on the home or even walk away from the deal without losing your earnest deposit money. 

Helps in Securing Financing

Unless you’re a cash buyer, you’ll need to obtain financing to acquire your dream home. Typically, lenders require a home appraisal to obtain the actual market value of the home before giving out the financial aid. That’s because the home will serve as the mortgage’s collateral if you default on your repayment. Getting a home appraisal will, therefore, also help you get the amount you need to purchase a home.

Don’t skip a home appraisal!

Understanding the importance of a home appraisal should top the list of your considerations when buying your next home. The process will always work in your favor and will help protect and get value out of your investment. For more information about a home appraisal and why you need one, feel free to reach out to us!