Bridget Alves                of Valencia

Blog - Full Service Real Estate Group, Inc

The appraisal process: How does it work?

Bridget Alves - Monday, May 16, 2016

When you want to set the asking price for your home you can either have the bank appraise it, have your real estate agent help you, or both. Regardless, arriving at an accurate price is absolutely vital. Too high and you'll easily price yourself out of the market, too low and you'll get less than you could have. Your real estate agent can provide you with a comparative market analysis that will provide you with very accurate information in regards as to where you should price your home. However, if you want something a little more in-depth, an appraisal couldn't hurt as well.

The first step in getting your home appraised is – finding an appraiser! An appraiser isn't necessarily going to be a know-it-all home-pricing guru, but they are trained analysts that will collect a variety of data on the home and be able to put it all together and arrive at the home's value.

The appraiser's visit can take anywhere from 30-minutes to a couple hours, depending on the size of the home and which – if any – issues they encounter during the appraisal process. They'll record the floor plan, record any improvements made to the home, measure the outside of the home, and will probably ask some questions. Then, they will utilize statistics that can be found in public records and listing services to find similar homes to yours that have recently closed.

The appraiser will then compare your home to the homes they've researched, making sure to take into account the age of the homes, numbers of bedrooms and bathrooms, any improvements made to the home and issues that may require work. The appraiser will add and subtract value to the home as they go through the comparing process until they finally arrive at the market value of your home.

It's important to note that the value of anything, no matter how well it has been scrutinized and analyzed, is ultimately going to be what people are willing to pay for it. As such, it can be possible to get a little more (or a little less) than market value even after it has been appraised.

How do you know you're getting the best deal?

Bridget Alves - Monday, April 25, 2016

Moving is a stressful process in and of itself, to be sure. Doubts and fears regarding the price you're paying for your new home can make it far worse. One of the best things you can do for yourself when looking for your new home is to give yourself the ability to make the purchase in confidence. If you know you're getting a good deal (or, at least, the best possible deal you can get), it can take a serious load off your shoulders and free your mind to deal with everything else. The question is: how do you make a purchase with confidence? After all, a new home is likely going to be one of the biggest purchases you ever make in your life.

Be realistic
Take a look at your budget and see just how much you can spend on a mortgage without having to lower other expenses. Just because you qualify for a $300k home loan doesn't necessarily mean you can afford a $300k home. If you find yourself in a position where your monthly mortgage payments are going to lower the budget for things like food, entertainment, car-related costs, etc., then you may need to rethink things.

Get info on the area
So, you've found a home that fits comfortably within your budget – good job! Your next step will be to get information on the area the home is in. Things like the school district, crime rates, accessibility to freeways, nightlife, commercial areas, etc. Even if the info regarding the area doesn't all apply to you, knowing it is still important. Regardless of whether or not you plan to have children, a home in a good school district will often have a higher resale value than one that isn't.

Get an appraisal

Most lenders will require an appraisal anyway, but even if they don't, make sure you get one. The appraiser will be able to to tell you the home's worth and you can then compare that to the seller's asking price.

Compare similar homes' selling prices

Most neighborhoods will have homes that have been bought and sold recently, so compare the price of the home you're interested in to recently sold homes in the area. If the home you're looking at is significantly lower, there's probably a good reason for that. Ask the seller if there are any issues with it. If it's significantly higher, there's probably a reason for that, too. Make sure you find out the reason(s) if you find yourself in either of these situations.

Why hire an appraiser?

Bridget Alves - Monday, September 21, 2015

When determining the asking price of your home, you absolutely need to know its exact value. A big mistake that home-sellers sometimes make is to estimate the value of their home based on the prices of other homes in the neighborhood. The problem with this is that you really have no idea how that price was determined, by whom, and why. Two homes in a neighborhood that look very similar can have values that vary by tens of thousands of dollars, depending on a host of issues. From obvious amenities like the existence of a swimming pool to seemingly innocuous details, such as the style of landscaping, everything about a home will affect its price.

The most surefire way to find out what your home is worth is to hire an appraiser. Appraisers are qualified and educated to understand the value of every little thing about a home. He or she will take a tour of the inside and outside of the home and formulate a value based on what exists and the state it’s currently in. One thing that’s awesome about an appraiser is that they can give you advice on improvements you can make to raise the home’s value. These improvements don’t have to be massive projects like redesigning the kitchen or adding additional bedrooms (though that would certainly do the trick), but may be something simple you can do yourself. Things like adding a new coat of paint, while a big job, can greatly increase the value of your home. 

Furthermore, appraisers can let you know some things that should be done, as opposed to what could be done. If they notice that some of the shingles on your roof are going to need to be replaced, they’ll let you know. Those patches of dead, brown grass in your backyard? They’re going to drive the value of your home down a bit, too. 

If you want to get the best possible price for your home, you need to start with an accurate price. Hiring someone whose job it is to know the value of things is really the best way to start. Hiring an appraiser on your own is great, but if you’re working with a real estate agent talk to them about it first. They likely have a list of trusted appraisers that they work with. 

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