Get the facts on your Fox Valley area home appraisal!
A mortgage lender uses a house appraisal as a tool to measure a property’s worth in an open market. The bank wants to know, for its own purpose, that when they lend you money for a mortgage on the property, that the property is worth at least as much as the mortgage. Keep in mind that a house appraisal is not the same as a Current Market Analysis (CMA-a local search of what similar homes are selling for that a licensed Realtor can provide you). In recent history, skimping on the appraisal is one reason some mortgage lenders got into trouble.
While doing the underwriting to approve a mortgage, the bank hires its own appraiser and has them run a detailed report using their specific criteria. You may have been personally approved for the loan, however the subject property must get the “satisfactory” rating as well. A knowledgeable Realtor conducting a CMA may be able to come close to a bank’s appraisal, but as each person is using different data, it will not be an exact match. Keep in mind that only the appraisal done by the bank is taken into consideration for the final mortgage approval. The fees may vary, but typically run about $200-$400 for an appraisal. Be sure to get a copy of it at your closing to save for your files.
What a home appraisal is not:
- A proper selling point to list a home for sale. What the bank decides it is worth versus what a buyer will actually buy it for are two entirely different issues in today’s market. Find an local Realtor to buy or sell a home. You don’t want to use a Florida agent to find a house in Ohio, although you can get a great referral by asking around. Real estate is all local, so get an experienced Elgin, IL agent for an Elgin or South Elgin home!
- A home inspection because the appraiser does not check for interior damage, working appliances, heating/cooling, electrical, plumbing or other issues that only a thorough home inspection would find.
- A cause for panic if it comes in too low. Here’s where working with a Realtor can really help out. Get all the details of exactly why the bank is not approving the loan and work the issues one at a time. A bad foundation is a very serious issue, for example, but I have worked with buyers and sellers that have fixed issues just as severe to get a property sold.