If you're in the process of buying a home, you've probably already realized that there are many steps involved in the process before you'll be able to close on your new house and get those keys in your hand. In addition to getting an accepted offer, finalizing your mortgage approval, and scheduling a home inspection, one step you'll probably need to complete before closing is that of having the property appraised by a professional.
Appraisals Are Usually Required By Your Lender
A real estate appraisal involves having an experienced professional determine the current value of a home based on its square footage, condition, lot size, and other home values in the immediate area. If you're taking out a mortgage for your home, your lender will most likely require an appraisal as a contingency of your loan approval. This is because your mortgage company will not want to lend you more money than the home is actually worth.
Appraisals Can Be an Additional Leveraging Tool
Ideally, a real estate appraiser will find that the home you're buying is worth exactly the amount that you and the seller have agreed upon. While this does happen quite often, there are some cases where a home may actually be appraised at a lower value than the agreed-upon purchase price. This may seem like it could be a deal-breaker, but an appraisal that comes back low can actually work in your favor. If the difference between the original sale price and the appraised price isn't too steep, you may be able to get the seller to drop the sale price even more in order to prevent the deal from falling through.
Appraisals Give You Added Peace of Mind as a Buyer
Above all else, having a real estate appraisal done on a home before closing can give you some much-needed peace of mind in your purchase. If you know that the home you're buying is worth at least as much as you're paying for it, you can avoid entering into a mortgage "upside down", which can save you a lot of hassle and stress if you try to resell down the road.
A real estate appraisal is often one of the last steps in the home-buying process, but it's a necessary one in most cases. If you have any questions or concerns about your appraisal, be sure to speak with your real estate agent today!