Las Cruces Real Estate | Appraisals: What are they and why are they important?
Ever wonder what your home's value is? Scared you may over-pay when purchasing a home? These are just some of the reasons why a home appraisal is so important! Today, we wanted to address not only why an appraisal is important, but what it is and what factors go into determining the value of a home.
To start with, let’s talk about what an appraisal is. An appraisal is an unbiased, professional opinion of the value of the home. An appraisal is typically ordered by the bank and is performed by a professional appraiser.
When performing an appraisal, the appraiser will look at comparable homes in the area that you’re purchasing or selling in. When evaluating homes, the appraiser will look at homes directly in your neighborhood that are similar square-footage and floor plan. This is important because homes in different areas are valued differently, just as homes of a different size are valued differently. During this process, an appraiser will typically look backwards 6-12 months; however, lately, many appraisers are only going back around 3 months since the market has changed so drastically.
Now, let’s talk about why an appraisal matters. The number one reason for getting an appraisal is to make sure that you don’t end up over-paying on a home. As we said, homes are valued very differently depending on the size and area, so it’s important to make sure you aren’t paying too much.
As a buyer, you do have the option to waive the appraisal, but without a sizeable down payment, most banks will not allow you to do this. Another option is to have the appraisal done, but then waive the appraisal value. This means that the buyer will essentially ignore the appraised value and pay the difference in price without the seller meeting them half-way or lowering the sale price. It is within your right to do this; however, we do not recommend it because it takes funds away from other areas like purchasing new furniture or appliances, or any renovations that you wanted to perform.
One last recommendation that we have is to try and be at your scheduled appraisal. This is a great time to watch the appraiser, ask questions, and learn how he/she goes about valuing your home.
Make sure to leave your questions and feedback in the comments section below or reach out to us here: https://www.zrealestate.com/contact/