When you accept an offer on your Pittsburgh home from a buyer who is obtaining financing, the lender will require an appraisal of the property.
Your real estate agent can help to walk you through the appraisal process. Under some circumstances, a seller may decide to have their home appraised for their use or establish a price before selling.
An appraisal is done by a licensed professional. The lender will request an appraiser to be assigned, but they do not control who that will be. The job of the appraiser is to determine the value of the home.
A home price set by a homeowner doesn’t always accurately reflect the actual value. Therefore, it is important to look at the homes sold in the area. An appraiser looks at homes within a half-mile radius of your home that has sold within the last six months.
The appraiser will consider the home’s location, upgrades, neighborhood, and values of the surrounding houses.
The purpose of an appraisal is to prevent the potential buyers from paying more for the home than its actual value.
An individual buyer doesn’t want to get upside down in a home price any more than a bank or mortgage company does. Therefore, a lender will not loan more money than the home is worth.
The appraiser knows the parameters for correctly determining your home’s values. He also knows what the state’s laws are concerning the process.
He’ll be looking at how many bedrooms and bathrooms your home has. He’ll also measure the square footage of your home. Next, he’ll look at the outside of your home and check things like the exterior walls, the shape of the windows, and the roof before moving into the home’s interior. Finally, the appraiser will thoroughly examine the exterior and interior of the house.
The appraiser will take photographs of your home to back up his analysis of the appraised value.
Some loan programs require the appraiser to report any defects or safety issues he has observed in the home. Your real estate agent will be able to advise you on the types of loans that may require this extra step.
Once the physical examination of the property is complete, the appraiser will prepare a report for the lender and the buyer.
It may take a couple of weeks for the lender to receive the report after the appraiser has visited the home.
If the appraisal comes in at or above the sales price, everything can move forward as planned. However, if the appraiser finds any issues requiring repair, he will make not of them in the report. In that case, once repairs are complete, the appraiser will confirm the repair is acceptable.
Occasionally the appraisal will come in lower than the sales price. If this occurs, the buyer and seller will need to determine how to move forward. Ask your real estate agent for their advice on handling this if you find yourself in this situation.
The appraisal is an essential step in the selling process.
The SAYHAY Team can walk you through any unexpected issues that may arise along the way. Contact The SAYHAY Team for a free consultation if you are considering buying or selling a home.