When you’re going through the process of buying, selling, or refinancing your home, a crucial part of the mortgage process is getting accurate and updated home appraisals. It’s even required if you’re giving your home to a relative to get an appraisal done.
What are Home Appraisals?
An appraisal is an objective assessment of how much your home is worth in the current market. As much as we want to believe our homes are worth what we think they are, often our sentimentality (or even our resentment) clouds our judgment. And unless you’re a qualified appraiser you won’t be aware of all of the different factors that will impact your home’s worth in the current market.
If you are dealing with an “all-cash” purchasing situation you may not need an appraisal, because the main point of the home appraisal is to show to the mortgage lender that you are not over-borrowing on the mortgage.
How much Home Appraisals Costs
Typically an appraisal is somewhere between a $200-$600 fee to the appraiser. Typically it’s an expense the borrower pays for, and either upfront or at the time of closing. It’s important to note that even if the sale falls through and there is no mortgage on that house, the buyer is still required to pay the appraisal fee.
What Happens if an Appraisal Goes Badly?
If an appraisal determines the house is worth less than the house is listed for the chances of the mortgage going through as-is are slim to none. With a mortgage the bank is using the house as collateral against the loan, and when the house is worth less than the money requested that is not a “safe bet” on the lender’s side. If the seller is willing to they can lower the price of the home to be within what the appraisal says the value is the sale can go forward, however if they’re not it’s very unlikely to proceed.
What Factors Impact Your Homes Appraisal
The biggest factor that will affect the property appraisal is the location. The appraiser will use recently sold homes in your neighborhood as the biggest guide. They will also consider the amenities, how many bedrooms, bathrooms, and how many updates have been done and its general curb appeal.
How to Prepare Your Home for an Appraisal
While most of the factors that impact your homes appraisal are beyond your control, there are some things you can do to make the process as smooth and optimistic as possible. Giving your house a deep clean makes it easier for the appraiser to see the value of the space and a general good impression.
Also, making sure you haven’t fallen behind on routine maintenance and do any light repairs that you’ve been putting off (e.g. fixing that hole in the drywall you forgot about, or fixing that cracked window in the garage) would bring down the appraised value of the home if not fixed. And while you’re at it, take some time briefly to spruce up the outside and beef up the curb appeal. It doesn’t have to be much, refresh any mulch, mow or rake, etc.
Past the Appraisal and Ready to Close on Your New Home?
Give us a call! At Frank B. Pallotta Law we are licensed Georgia Real Estate Lawyers with more than 20 years of experience helping our clients navigate the legal processes associated with homeownership. We’re here to demystify the closing process one question at a time.
