Knowing when (and how) to appraise a home can be a struggle for some. Many homeowners have no idea when to do it and end up loosing out on better rates for their mortgage. Failure to do it the correct way can even cause them to loose their financing. That is why they should consider carefully when to do it and when they should avoid it.
When is it Time to Get an Appraisal?
1. If the homeowner wants to take advantage of a good rate and refinance with a home then they should get an appraisal first. This allows them to then get the best rate possible if the appraisal is good. The homeowner can also find out that it is not the best time to refinance and decide to wait.
2. Another reason that a homeowner would get an appraisal is when they wish to sell the home. They can get the accurate price to list the home for and get the most money out of the sale.
3. Buying a home is another time to get an appraisal for a home. That way they can pay only what the home is worth and not a penny more.
4. Other situations might be involved with business loans. People sometimes use their home as collateral for a business loan. Other loans like that qualify as well.
5. Tax reassessment is another time that a home needs to be appraised.
Why Do Homeowners Need a Good Appraisal?
Lenders must know that the money that they are lending will be able to re-coup their money if the real estate deal goes into default in the future. The lender can sell the property and get their money back. That is why homeowners need good appraisals.
Most appraisals run $325 to $400, but can go up depending on the property size, type and location. This is a cost that is well worth the money though as it allows the homeowner or buyer to have the most accurate information for the transaction.
– The “Uniform Residential Report” is the most common type of appraisal to expect. Pictures of the home needs to be taken and comps must be performed based on nearby properties. These are comparison sales the local home that match the same criteria. This offers the market value of the home. This also can help evaluate what it costs to build that same home from the start. Many aspects of the home interior and upgrades also affect this price.
– An “Automated Valuation Model” is another type of appraisal to use. This type of appraisal looks at the cost of the home and the recent sale of comparable home nearby. It does not include the upgrades or any aspect of the home value. It is just the basic way to evaluate the property value.
Either way, the lender will typically want to have a say in the appraiser that is used to show the property value. That covers them no matter what the situation becomes down the road.