The Beginner’s Guide to
Importance of Property Appraisals when Buying or Selling
When you wish to buy a property, or indeed, to sell one, there are a few crucial steps you need to take in the process. You first have to get the house inspected, to determine what condition it is in. you then need to have it appraised, to determine what value it holds. An example is a house that has been advertised to sell for a given amount, after which the appraisal report reveals that the house is valued at a slightly lower amount. The seller always wishes that the appraisal sticks to the stated value, or even higher.
In most cases, the financial institution extending the mortgage facility covers the appraisal expenses. It is in their best interest to know the true value of the property they are about to finance. It is in your best interest as the buyer to ensure you are dealing with an efficient and effective leader, who will not waste time getting that process done, so you know what you are dealing with. While they may have other pressing interests elsewhere, this purchase is to you quite an important undertaking.
You may have started the selling process as you await the appraisal and its report. If the report comes back to show a disparity in the quoted value and the true value of the house, you have several options as a buyer. You can first ask for the price to be adjusted to reflect the true value. If this does not happen, you can opt-out of the negotiations and the sale, under the appraisal clause. You can thus see why it is important to never commit to any process unless such a clause exists, to safeguard you in the near future. You also have the option to seek another appraisal from another firm. While this will cost you more, you may get a different report. But there is also the risk of the report returning the same, and the process taking longer than necessary. If the contracted appraisal firm was the best in town, there is usually no need for another appraisal.
For a seller, the idea of going into the market is to make a profit off the sale. An appraisal may not take into account factors such as the competition for houses in the market. Its singular focus may end up costing the seller a decent return on the house. There is, therefore, a need to undertake the negotiation carefully, with the appraisal process in mind. You may need to involve realtors who have sold houses in the area to support your quoted higher price, as a reflection of the current market standards.
There is, therefore, a lot that goes into the property selling and buying process. There are appraisals to level the playing field. At the same time, there are other forces at play besides the valuation of the property. You have to approach this process carefully, either as the seller or as the buyer, for the best results. It is important that you talk to an experienced appraiser in the market, one who is well established in that specific area. That way, you can be certain they will handle the process the right way.