Residential appraisals are real estate values assigned to individual properties based on their current market value and trends in the real estate market, neighboring home values, and other factors. A home's appraisal value can change dramatically in a short time. Whether the values go up or down, homebuyers like you need to be aware of what's going on.
When you have appraisal services appraise a home you're interested in buying, you're benefiting in more ways than one. If you're financing the home you're buying, you may have to get the property appraised anyhow since lenders want to know they're adequately financing a property. Here are reasons why residential real estate appraisals should matter to you.
1. You know what you're bringing to the table
Did you know that if you put an offer on a home and the home doesn't appraise at the accepted offer price, you'll be responsible for ponying up the difference? You want to know what the appraisal value is on any home you're wanting to buy so you know how much money you need to bring to the table, in addition to your down payment. Just because a home doesn't meet appraisal doesn't mean it's not worth buying, however, unless you have a very limited budget.
2. You know whether you're getting a great deal
The lower the home's asking price is in accordance with its appraised value, the more the home can be a great deal for a buyer. You want to buy a house that comes in at a higher appraisal than what you're paying for it so you have instant equity in the property. You can still buy a home that appraises exactly at its asking price because still means you have the opportunity to build equity over time.
3. You know what the max value can potentially be on the home
If you want to buy a house in a neighborhood that could use some work, knowing the residential appraisals of the area provided by a real estate appraisal services company can be helpful to you. You want to put equity into a property so it's comfortable, but not so it's worth too much in the market and you cannot recoup your investment, which you can discover more about when you have the appraisal done. The residential appraisals are usually done towards the end of a home's purchase process, so ask your lender when this process might be done on the home you're wanting to buy.