The Importance of Home Appraisals

Buying and selling a home can be a long and tedious process. If you’re selling a property, you have to start by choosing a listing price. You can’t just pull a figure out of the air and ask prospective buyers to match it. Instead, it takes countless hours of deliberation and research as you consult with a real estate broker to help you. Often, your real estate agent will recommend the services of an appraiser to help determine your home’s market value before you can list it.

Many people often leave these responsibilities to their real estate agents. However, if you’re selling your home, you should be in the loop throughout the process.

What is a Home Appraisal?

Typically, before selling or buying a home, you’ll hire a professional to carry out an unbiased assessment of a property’s value. The professional determines the value of the house by judging its location, condition, and features.

Depending on how you’re purchasing a home, you may need to get an appraisal. For instance, many lenders – both banks and private parties – will require you to get a home appraisal before lending you the money. Most lenders institute this policy to protect themselves because they don’t want to risk losing money by lending to someone who can’t afford the monthly mortgage payments. Therefore, in most cases, homebuyers end up needing a home appraisal.

How Do Home Appraisals Work?

According to the Appraisal Institute, real estate appraisers must hold a valid license, a requirement in all 50 states, and be familiar with the local area. An appraiser will usually calculate a property’s appraisal value by looking at the recent sales of similar homes in the area. They will also assess the market trends and perform a visual inspection of the house. Moreover, the appraise will account for the home’s amenities, such as the number of bedrooms, bathrooms, square footage, floor plan, etc. The appraiser then determines the value of your home.

Why Are Home Appraisals Essential?

There are several reasons why you should get a home appraisal. These include:

Setting a Price

If you’re looking to sell your home, you’ll need to set a price tag on it. Pricing your home can be a challenging endeavor, requiring an appraisal. There’s a fine line between pricing your home too high or too low. If you value your property higher than its market value, the odds of it selling decrease significantly. Moreover, the longer a home stays on the market, the more questions and concerns prospective buyers have about it. Likewise, setting your home’s value too low can also be problematic, resulting in people underbidding and causing you to lose property gains. In addition, you can also incur a loss by undervaluing your property. Therefore, you must get a home appraisal if you plan to sell your property.

Lender’s Requirements

It might not come as a surprise to you that most people purchase homes through financing. Statistics show that two-thirds of homebuyers purchase a home through acquiring a conventional mortgage. Other than a standard mortgage, homebuyers also have the option of going to private lenders. However, regardless of how you’re financing your home, nearly all lenders will require a home appraisal before lending you money. Lenders aren’t willing to lose money by lending to someone who can’t afford to pay them back, thereby making home appraisals a requirement.

Get Assistance from a Professional Real Estate Agent in Michigan

Whether you’re looking to buy or sell a home, you need a real estate agent. Statistics show that 87 percent of all home transactions involve a real estate broker. Real estate agencies have individuals knowledgeable about the local area who can simplify the buying-and-selling process.

Homeowners and prospective buyers in Michigan can rely on the help of our services. WHY LANE Coldwell Banker Realty helps homeowners sell property in St. Joseph, Lakeside, Michigan City, Sawyer, and more. Likewise, we aid homeowners to browse and select from homes for sale in locations along the Lake Michigan coastline.

Contact us today to learn more about how we can help you.

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