Before rushing in to buy a house that you fell in love with, and agreeing to pay the price the seller is asking, you should take a step back and do an appraisal. An appraisal gives the correct value of the house in today’s market.
Appraisal is different from the Comparative Market Analysis (CMA) which is done by a real estate agent. Real estate agents use their knowledge of the local market based on the info available to them in the multiple listing service (MLS). The fact is appraisals are more reliable and accurate in establishing true value of the house.
Appraisals are performed by licensed real estate appraisers. Unlike real estate agents who do CMAs to price your house for sale, appraisers have no vested interest in the sale of the house. Licensed appraisers are governed by statutes and regulations, and they must take approved courses and a test to obtain their license and continuing education to maintain their license. The appraiser will do a walk-through of the house, noting anything that might change your house’s value. The appraiser will sketch out the floor plan for the home, take photos of the house and look for any safety violations. If there are any such violations, those issues may need to be fixed before you pay for the house. The role of the appraiser is to provide an objective, impartial and unbiased opinion about the value of your home. If you want to make sure you are not paying more for your house than its worth, you need to do an appraisal. Your house value is based on such factors as location, amenities, structural condition, square footage, number of bedrooms, number of bathrooms, and recent sales of similar nearby houses. Appraisals are conducted for single-family homes, condominiums, and multi-unit dwellings. Note: An appraisall is not a home inspection. Thinking of buying a house for yourself and your family? Contact OwnerFinance, we’ll work with you all through the home buying process. While others may decline due to credit blemishes or other issues, we are more flexible in our qualification criteria, and can get most people qualified as long as you have income and downpayment.
Who Pays for Real Estate Appraisals?
Appraisals typically cost between $375 and $500, but appraisers will charge additional fees if they need to make multiple visits to the property for any reason. It is usually paid by the homebuyer. When there is a financing company involved, they will collect the cost of appraisal from the homebuyer upfront. Even if the appraiser’s fee isn’t collected upfront, the cost will be passed on to the homebuyer as a closing cost for most financing programs.
Typically the financing company orders the appraisal as soon as it receives the signed purchase and sale agreement in Massachusetts. In Massachusetts, it is important that the homebuyer receives a satisfactory appraisal prior to the loan commitment date.
If in the opinion of the appraiser the home’s value is less than the agreed-upon purchase price, the homebuyer’s financing could be in jeopardy. Either the lender will deny the loan or will require the homebuyer to increase the amount of their down payment by the difference between the agreed-upon price and the lower appraisal value. If the homebuyer does not have the available cash to increase the amount of the down payment, the buyer will need to cancel the transaction before the loan commitment deadline.
Questions? We Love To Hear Your Questions, Contact:
Amin Shah
Shahclan Boston – OwnerFinance
Boston, MA – USA
Phone 617-787-5151 (Landline)
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