The home appraisal is just one of the many tasks that are needed before you can complete the sale of your home. Unfortunately, misunderstandings about the appraisal could result in delays in the closing. To help keep the sale on track, here are just a few of the myths about appraisals.
The Buyer Wants the Appraisal
One of the most commonly believed myths about a home appraisal is that it is requested by the buyer. Although the buyer likely has interest in the results of the appraisal, he or she is not the party asking for it. The buyer's lender is.
The lender uses the appraisal to determine if the home is a good investment. If the appraisal reveals that the home is not worth the amount that you are asking, the lender most likely will not approve the buyer's loan. As a result, the buyer could opt to pull out of the purchase and look for another property.
To avoid this scenario, it is important that you have an idea of your home's true worth. Your real estate agent can help with assessing your home's value. He or she will take into account factors such as the amenities in your home and the comparables in the neighborhood. Once the agent has an estimated value, he or she can help you determine a fair listing price for your home.
The More Amenities Your Home Has, the Higher the Value
If you have recently made upgrades to your home, you might feel that your investment will automatically translate to a higher appraisal value for your home. In reality, there is no guarantee that it will. If you upgraded your home in anticipation of selling it, you could possibly have made a bad investment.
During the appraisal, the appraiser does look at the amenities that are in your home, but he or she also factors in what is considered valuable in your neighborhood and which features are being sought after by buyers. For instance, if you have the only swimming pool in your neighborhood and there is not a huge market for it at the moment, its presence might not have a significant positive impact on your appraisal value.
If you have not yet made upgrades but are planning to before you put your home on the market, talk to a real estate agent first. He or she can help determine which upgrades will have the most impact on your home's value.