Good Information for Columbus Homebuyers to Know about Home Appraisals

Good Information for Columbus Homebuyers to Know about Home AppraisalsAs you begin your Columbus homebuying process thinking about the appraisal and how it will go is probably not at the front of your mind. However, an appraisal can be and is an important process in a Columbus home purchase. It is often ordered by the mortgage lender to help ensure they are making a solid choice in lending money to the home buyer. The results of a home appraisal can make or break approval of a mortgage loan and as such becomes very important to Columbus homebuyers.

What an appraisal is

A home appraisal is a standard part of what is called the due diligence portion of a home sale. This is part of the sale after both parties have agreed to the home purchase offer and signed the purchase agreement where a professional comes in to look at the property and evaluate its fair market value.

The appraiser is licensed and official and will come out and look at the property in person as well as do research on the property to get all aspects and details to compile a report about the estimated value of the home and their professional opinion. Appraisals can be orchestrated by both the buying and selling parties but most often are a mandatory order from the mortgage company.

What an appraiser looks at in a property

The majority of licensed appraisers will use the Fannie Mae uniform residential appraisal report to help launch them into an assessment of a property value. This report helps an appraiser with a form to assess a property's current condition, layout, size, and any other qualities that would boost value or take away from it. These qualities can include the square footage of the home the number of bathrooms and bedrooms, if there are any structural or safety issues, if there are permitted upgrades, etc. Appraisers will also look at the condition of the land with the property as well as the condition of surrounding properties in the area. They take into account any factors of the environment around the home like the presence of railroad tracks.

After the appraiser has looked at all the physical aspects of a home they will look into the market aspects of the home. One of the biggest market aspects they look into is checking out comparable home sales within the area in a specified amount of time. The appraiser might use what homes are selling for in the area as they're starting value point and move their valuation up or down depending upon specific aspects of the home itself.

Sometimes the appraisal comes in lower than expected

Sometimes the home appraisal can come in lower than the offer to purchase price of the home. This is called an appraisal gap. This is not uncommon when a home has undergone a bidding war with several buyers increasing their offer to become the accepted offer on the home.

If an appraisal gap occurs the mortgage company will only lend up to what the home is worth and will expect the potential homebuyer to cover the gap between the appraisal and the contracted offer. If the buyer has included an appraisal clause this allows them to decide on whether to pay the difference or back out of their offer without losing their earnest money.

If a buyer feels that the appraisal is incorrect they can take measures to ask the appraiser to reconsider their assessment or to have a second appraisal conducted to determine if the home is worth more money.

You can also ask the advice of your real estate agent on whether they believe that the appraisal professional has made a fair assessment of the value of the home.

If you're considering the purchase of a Columbus home I can help. I am highly knowledgeable in all Columbus real estate and can help you find a property that you will love and is within your affordable budget. Contact me anytime with your Columbus real estate needs.

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