When you find a home that you love, you probably already have been pre-approved by a bank for a certain amount that will enable you to buy a home. Once you put in an offer on the home and it’s accepted, however, you may need to take a step back. The appraisal can help you to know what the value of the home actually is. The bank may decline your loan based on the appraisal This is one of the most important steps to obtaining the financing that you need to purchase a home.
What Is An Appraisal?
In a nutshell, an appraisal protects the bank from investing in a property that’s worth less than what they’re paying for it. This process also protects you as a buyer from buying a property that’s worth less than what you’re expecting it to be worth.
Although the appraisal makes sense financially, it doesn’t mean that the process won’t be emotional for you as a buyer and for the sellers as well. The appraisal can in fact make or break the purchase of what you consider as your dream home. There’s a lot of data that’s collected for the appraisal, which can cause nerves to be shot on both sides while the value of the home is being calculated.
Who Will Pay For The Appraisal?
The buyer will pay for the home appraisal along as part of the closing costs. The appraisal can be a few hundred dollars.
What Goes Into Calculating The Worth Of A House?
Appraisers look at many different factors including:
The square footage of the property
The number of bedrooms
How many bathrooms the home has
The condition of the home
How much have comparable properties have sold for in the area
Other factors pertaining to health and safety
The appraisal process can seem complicated, but once you’re educated on the matter, you’ll be prepared when it gets to that point in the home buying process.