One of the most important steps to take when buying a home is to get the new home appraised. Appraisers are certified, licensed professionals who determine the real value of a property.
What appraisals are not
Appraisals differ from the listing price suggested by your realtor, which is an estimate based on what similar properties sold for nearby.
Appraisers also aren’t home inspectors. While appraisers may note any problems they come across, they won’t test your home’s systems or check for code violations.
Two appraisal methods appraisers commonly used are the sales comparison approach and the cost approach. The former is similar to what real estate agents do to determine listing price by comparing the home with several others, except this is a more comprehensive comparison. The latter is primarily for new homes, and it looks at the cost to rebuild the structure.
What it should include
The appraisal should include the following 3 things:
- Unbiased assessment of the property’s physical and functional characteristics
- Analysis of recent comparable sales
- Assessment of current market conditions affecting the property.
Appraisal fees may vary but you shouldn’t pay more than $250–350 in most areas for a typical single-family home. Although home appraisals are typically several hundred dollars, their costs is outweighed by the money it could save you if you avoid overpaying for a home.
Here are 4 benefits of getting your new home appraised.
- Protects lenders from financing an overpriced home
- Protects you, the buyer, from paying too much for a home
- Flags potential issues with the property
- Helps you negotiate a fair price
Having an independent appraisal done on a property before you make an offer is a good idea. It’ll tell you what the property is worth and help ensure that you don’t pay too much. Your lender can also ask for a recognized appraisal to complete a mortgage loan.
If you’re thinking of selling your home and want an accurate idea of your home’s worth, contact us, and we can set you up with an appraiser.