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July
25

Buy a House Home Appraisals
Wouldn't it be nice if buying a home were as simple as purchasing a new pair of shoes? You find a pair you love, you pull out your credit card, and take them home.

Home buying isn't that simple. After you negotiate a deal for a home you love, you need to obtain a mortgage loan from a lender.  One of the most important steps of getting a mortgage is having an appraisal done to confirm the purchase price of the home.

Our REALTORS® believe it's important for our clients to know and understand important home-buying steps. We've prepared this brief guide to tell you what you need to know about appraisals.

What is an appraisal?

An appraisal gives your mortgage company a professional opinion of your home's value.

Why do you need an appraisal?

When your lender finances your home purchase, they use the home as collateral for the loan. Before they sign off on your mortgage, they need to make sure your home has enough value to recover their investment if you default on your loan.

Who hires the appraiser?

As professional ethics dictate that lenders minimize the potential for undue appraiser influence, they hire the appraiser but rarely make direct contact. To adhere to "appraiser independence" standards, lenders work through Appraisal Management Companies. AMCs hire appraisers and monitor their performance. They receive mortgage company appraisal requests, assign them to qualified professionals and forward the finished reports to lenders.

How much is the appraiser's fee and who pays it?

A Home Advisor survey of 3,400 members found that appraisal prices range from $250 to $450 with a national average of $331. The lender hires the appraiser but you pay the fee. It's one of the services that make your home loan possible.

How does an appraiser establish a home value?

An appraiser documents a home's age, construction, square footage, number of bedrooms and bathrooms, improvements, home systems, flooring, appliances, fixtures, and more. Outside they document pools, patios, decks, doors, windows, garages, and other features specific to your home.

The final appraisal considers damage and condition issues, public records, and comparables (homes similar to yours.) An appraisal report presents photos, sketches, and other location data. They also incorporate a list of comparables considered and their photos.

What happens next?

When the appraisal is in line with your contract price or higher, your lender can move forward with your loan process. If the appraised value is lower than your agreed price, your lender will decline your loan.

If you have an appraisal contingency clause in your purchase contract, you may be able to renegotiate your sale. If not, you can make up the difference with cash or walk away from the deal.

Your Brunswick County Home Buying Professionals

The home-buying process will never be as simple as buying a new pair of shoes, but we can help you get through the complications. Contact Margaret Rudd & Associates when you're buying or selling a home in Brunswick County.