A home appraisal can be a scary thing, especially after you’ve found a buyer who’s made an offer on your home.
After a buyer makes this offer, the lender working with the buyer will order an appraisal of your home. The goal is to make sure that the home isn’t worth significantly less than what the buyer has agreed to pay for it.
If you’re selling, then, you want the appraisal to come in high. If it doesn’t, it could scuttle your home’s sale. Your buyer’s lender probably won’t loan the buyer money if it doesn’t feel that the house is worth what it is selling for.
The appraisal process, then, causes a bit of nerves for most home sellers. Here, though, are some myths – highlighted in this story by the National Association of REALTORS® – that too many homeowners believe about appraisals.
An appraisal and a home inspection are the same thing: This is probably the most common myth about appraisals. And the truth is, an appraisal and a home inspection couldn’t be more different. An appraiser is trying to determine how much a home is worth in today’s market. A home inspector is looking for problems and defects in a home.
You can trick an appraiser into assigning your home a higher value: You can’t. Much of what makes up a home’s value is out of your control. Appraisers will study your neighborhood and the sales prices that homes similar to yours have fetched in recent months. You can’t impact what the house three doors down sold for. Yes, you can make sure that all your appliances are in working order and that your home is clean and well-maintained. But this won’t guarantee you the appraisal you need.
Appraisers will always come up with the “right” figure: Many homeowners think that appraisers will always come up with the value needed to make sure a real estate deal closes. This isn’t true. Appraisers will study comparable home sales, your home’s neighborhood and your residence’s condition all in an effort to come up with an accurate value for your home. The fact that you and the seller agreed upon a price of, say, $350,000, won’t enter into the appraiser’s calculations.