You’ve found your dream house and now it’s time to cross all your T's and dot all your I's so that you can call it your home. But, one of the first items on your closing checklist is home appraisal. So, what exactly is a home appraisal and what role does in play in the home purchase process? Here, the team at Farnan Real Estate helps break it down so you know just what to expect when it comes to a home appraisal.
The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately.
During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has a deck, a view, or a large yard. The appraiser will also compare the home to several similar homes that were sold within the last six months in the area.
The final report must include a street map showing the property and the ones’ compared, photographs of the interior and exterior, an explanation on how the square footage was calculated, market sales data, public land records, and more.
After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safeguard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
To learn more and have other home buying, selling or real estate investing questions answered contact the team at Farnan Real Estate. Farnan Real Estate offers clients over 25-years of real estate and client services experience, all with the indelible backing of Patterson-Schwartz, Delaware's largest independent REALTOR® and leader in the Mid-Atlantic region. The Farnan team is prepared to guide you through the buying/selling process, connect you with trusted partners and aim to reducing the levels of stress that typically come with buying and selling a home. Contact us today to get started.