All the negotiations are done and you have finally have secured a buyer for your home. The only obstacle remaining is the appraisal. Don’t worry, you have already won half the battle.
Sales Agreement
When an appraiser looks at a home, there are several factors that go into determining the homes appraised value. The contract is one of the primary indicators the appraiser uses to assign value. A home’s worth is determined by what someone else is willing to pay for it. When two parties agree on a purchase price, they are determining the homes worth.
Market Value
When a home is sold, the bank requires an appraisal to verify the value of the property. A record of these sales are held at the county courthouse. In general an acceptable comparable home must be within 15 miles of the home, in a similar community, and occurred within the past 6 months. The closer the homes are together and the more recent the comparable sale the better the comparable is for the establishing value.
Other factors appraisers use are the comparable features of the home. For instance, the size of the home in square footage, the condition and age of the home, the quality of materials used in construction, and any renovations that have been made. Normally, an appraiser needs three comparables to establish value.
In Closing
On the day of appraisal, be available to discuss any repairs or renovations with the appraiser. Have your home cleaned and any clutter removed and cut the grass. Having the interior and exterior in great shape when the appraiser sees it will make a great first impression.