Anytime you plan to buy a home you will want to hire a professional appraiser to determine the value of the home. Appraisals are typically conducted when a home goes up for sale by the owner, when a potential buyer wants to purchase a home for sale, or when a homeowner is attempting to refinance their home. The value of the home is determined by some factors including amenities, location, renovations, and similar aspects.
Why get a home appraised?
Anytime a buyer borrows money from a bank or lender to purchase a home the lender will require an appraisal of the home to determine how much money to lend the borrower. These appraisals are meant to act as proof of the value of the home, so the bank knows it is worth the amount of money they are lending. Otherwise, the bank could end up loaning out more money than the home is worth and could lose money. Additionally, appraisals help determine if a buyer is getting a fair deal on the home they intend to buy.
What about low appraisals?
Low appraisals are not good for the seller nor the buyer. A low appraisal means the home is not as valuable as the buyer or seller though it to be. A professional appraiser has been trained to look for defects in the foundation, rot, or pest damage in the roof or supports. Typically, a lower appraisal value in a home indicates the home has a defect, which could translate into costly repairs down the road.
A buyer or seller could pay for a second appraisal if they believe the first was not done correctly or to merely confirm the assessment of the first appraiser.
Appraisals help determine risk
Getting an appraisal performed on a home not only helps the bank determine the value of the home, but it also helps the buyer and seller identify areas of the home that need improvements or repairs. If the appraisal comes back extremely low, it may be best to stop the sale or the purchase of the home and wait until repairs or improvements can be made.
When an appraisal comes back above the value of the for the area on similar homes that have been sold recently it usually means that the owner of the home has done several things to improve the value of the home.
Making small repairs to the home will help increase its value. These can be small things such as repairing any dings or nicks in the drywall and applying new paint to the walls. It could also mean repairing broken tiles or replacing moldy caulking in the bathrooms.
A home’s value also increases when the exterior has been touched up. Again applying new paint, replacing cracked or damaged siding, new roofing tiles, functioning rain gutters, and nice landscaping all contribute to increasing the value of the home.
There are also renovations which can be done to increase value, remodeling a kitchen, adding tile to a bathroom, putting in new carpet, or installing hardwood floors in the dining room will greatly increase home values.
If you are in the market for a new home, then check out our listings of lease-to-own homes today.