Appraising the value of a home is often less of a science and more of an art. There really isn’t a straightforward formula to putting a price tag on a house and it largely comes down to the market in your area.
A home appraisal is a critical part of the mortgage process and depending on what stage an appraisal comes would very well mean the difference between a deal and no deal. With those facts, do you know how much your home is worth?
What is an Appraisal and Who Conducts it?
An appraisal is essentially the fair market value of a home or piece of real estate. Appraisals are conducted by trained, certified professionals who are educated on all of the factors that affect home prices.
An appraisal takes into account a variety of factors but mostly looks at historical data and home sale prices in your immediate vicinity. Other factors include square footage, proximity to certain landmarks, and the current real estate market. Generally speaking, an appraisal comes towards the end of a mortgage process and is usually the final say on the sale’s price.
How Do I Value My Home?
This is a bit of a tricky proposition. If you’re looking to sell a home yourself, you’ll have to remove every bit of emotion and intrinsic value you may have in the home. This is exactly why an appraiser’s objective opinion of a home’s value is the final word on what the home is worth.
But if you do choose to value your home, there are several ways to go about it. First, you might start by getting an idea of what Zillow has to say. Zillow is an online real estate database and does a lot of the legwork for taking local sales and market conditions into consideration for you.
Another way to get a gauge on the value of your home is to ask for the help from some local realtors. Local realtors know your market and can certainly give you a pretty educated ballpark for the value your home might bring on the market. Take several opinions and make an educated guess yourself based on those numbers.
Why Does Value Matter?
Besides the obvious matters of sales price and market value, your home’s value has a great bearing on your present and future which is even more reason to get it right.
If you’re looking to buy a house, the market value of a home matters greatly because it may very well mean the difference between a lender approving a loan and either renegotiating or scrapping the deal all together. This is why it’s hugely important for your home’s appraisal to match up with the market price of the home.
With regards to the future, we purchase homes with the hopes that over time they will appreciate in value and give us a bit of a return on our investment so-to-speak. If your home is overvalued when you purchase it today, it may not appreciate as much in value or may actually lose value over time. Again, another important reason to nail the valuation up front.
Getting Valuation Through the Mortgage Process
Like we’ve said, typically appraisal is one of the final steps to the mortgage process which means there are many more which precede it. If you’re looking at buying a new home and aren’t sure where to start, then contact Tidewater Mortgage Services, Inc’s experienced loan officers today!
