One of the most important economic decisions in a person’s life may be buying a home. Choosing the place where to enjoy the next years of your life and that best suits your future needs is very complicated, as is knowing the price of that home at that precise moment. At the time of selling, buying, even renting your home, you’ve probably been told that you need an appraisal by a specialized company that values the property. This is an inevitable part of buying a home for anyone who needs a mortgage and it can be an important decision maker. With that in mind, it’s crucial to know what you’re getting into before it happens.
The seller always intends to get as much money as possible for their property, unlike the buyer, who wants to spend as little as possible. In this case, a third entity, most of the time the bank, needs to know the objective value of the property and therefore implies a company specialized in official appraisal, in this case, conditionally mortgage, regulated by the official regulations of the Bank.
Especially considering how the value of a home can fluctuate between two very different prices, it is important to know the real value through an official valuation of the property that we liked. This way, we will know if the monetary offer we received is adapted to the demands of the market at that time.
In order to conduct your appraisal, the appraiser—who is licensed and trained—will go to the property for a site visit. Within the visit, he or she will perform the following:
- The appraiser has to observe the property.
- The appraiser must draw the plan of the property taking the measurements in the visit.
- The appraiser must take photographs of all the rooms.
- The appraisal as a document must carry at least six comparable witnesses of similar properties that are on the market at that time in the same area.
- Check that there is no urban irregularity in the present farm
For the financial institution, the appraisal is the guarantee of knowing that the home has a minimum market value to ensure the repayment of your mortgage loan in case of default. The parameters to calculate the real appraised value are may differ, depending on the area, its services and location, the situation of the building within the property, in height orientation and sunning, in terms of its type of single-family dwelling or community, the constructed surface and its distribution, the quality of the materials as well as their terminations, the antiquity and the state of conservation.
In conclusion, an appraisal is important because it protects your investment. It’s there to ensure that, as the buyer, you don’t pay more than the home is actually worth. And as the seller, you get what your property is worth. In addition, it is important to perform an appraisal because it is the best way to know if the house of your dreams has a reasonable value, gives you the ability to negotiate otherwise and, in the last case, is the best way for both of you to achieve the best possible agreement.
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