What you need to know about home appraisals and how does it impact the real estate transaction?
Knowing the value of your property is important when you want sell your house. If you are the buyers, you and your lender want to know the value of the house, rather than what seller is asking for. Whether you’re selling or buying, you probably won’t thinking much about the home appraisal process. It isn’t one of the most glamorous parts when buying or selling a home, and yet it is the process you need to go through. Here are what you need to know about home appraisals when selling your home in Phoenix AZ.
What is an appraisal?
An appraisal is a written document that shows an opinion of how much a property is worth. The value is based upon a market analysis of recent sales prices for similar properties in the area, and the property’s physical condition. The appraisal gives you useful information about the property. It describes what makes it valuable and may show how it compares to other properties in the neighborhood. An appraisal helps to assure buyer that the value of the property is based on facts, not just the seller’s opinion.
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What’s the appraisal process?
Even though there are many subjective parts of the appraisal, the process itself is straightforward and clear. An appraiser comes to the owners home and inspects it for, what they feel, make it valuable. This is where the subjective nature of an appraisal comes in. The owner may personally may like the convenience of window air conditioning units, but the appraiser will be deducting value because there isn’t central heat and air. If you live in an area such as Phoenix, having central air conditioning is more valuable than some parts of the country. Market desires play a big part in home values and can make a huge impact on an appraisal.
The appraiser will look at the age of the home and how it was made compare to similar homes in the neighborhood. The air conditioning and heating, plumbing and wiring will also come under inspection. Features, such as number and size of bathrooms and closets will also be a factor in determining the home’s value. The presence or absence of a garage, attic and basement will also determine the value of your home.
In addition to looking inside your home, livability issues and size; the appraiser will also look at the outdoor areas of the property and the location in relation to your neighbors. How many homes are for sale, and the rate they are selling, in your neighborhood will also have an impact on your home’s worth. The presence of new construction in the area can also increase the value of your home.
Tips to attain a higher home appraisal when selling your home
Since most of these features are set and can’t be changed, there is little you can do to affect the appraisal value. However, there are some aspects of your home, that can be improved easily and quickly that can make a difference to the appraised value:
- Clean up
As simple as this sounds, an appraiser will get a better impression of a clean and neat home as of one that is dirty or messy - Improve appeal
Not just inside the house, but the whole property as well. A fresh coat of paint or landscaping the yard will increase the appeal of the home. If that is out of reach, mowing the lawn, cleaning the exterior of the home and removing clutter will help the appraisal - List your updates
Keeping track of improvements, especially since the last appraisal, can make the appraiser’s job easier and pointing out improvements that he might not notice. The improvements that the appraiser would be interested in are permanent improvements. New furniture doesn’t qualify, but new carpeting would
Who is paying for appraisal when selling your home?
This is a negotiable term of the offer that is often times dictated by the local market. However, in most cases, it is almost always the buyer will have to pay for the appraisal as buyer’s lender required it. However it is not uncommon for a buyer to ask a seller to pay the appraisal cost, which may include in closing costs.
Also read:
What is seller closing cost when selling a home in Phoenix?
What happen if appraisal value came in low?
If the appraisal return a value that is less than the accepted offer, the loan will only be approved for the appraisal amount. The seller would need to bring the price down to appraisal amount or the buyer may need to pay the difference in cash.
Should I order my own appraisal when selling my home?
It is a good idea to have an appraisal completed before you put your home on the market. What a better way to determine real market value than to have a certified appraisal. You’ll be able to better prepare yourself for the probable value and will be able to avoid low ball offers based on the fact that you can share that appraisal with the buyers and buyer’s real estate agent.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ and surrounding area, we hope you will consider us. Contact us today for complimentary consultation.
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