Why Do I Need A Home Appraisal?

If you're in the market to buy a home, you'll likely need to obtain a mortgage to finance your purchase. In the mortgage process, a home appraisal is a crucial step that can ultimately impact the amount of money you'll be able to borrow. Understanding what home appraisals entail and what to look for in an appraisal report is essential for all homebuyers.?

What is a Home Appraisal??

A home appraisal is a professional assessment of a property's value conducted by a licensed appraiser. The appraiser evaluates several factors, including the property's location, condition, and amenities, to determine the home's current market value. The appraisal ensures that the property's value is sufficient to cover the amount of money the lender is willing to lend to the buyer.?

How are Home Appraisals Conducted??

During the appraisal process, the appraiser will physically inspect the property to evaluate its condition and features. They'll also consider the property's location, like the neighborhood, school district, and proximity to public amenities. The appraiser will also research and analyze recent sales of comparable properties in the area to determine the market value of the home.?

What Should You Look for in an Appraisal Report??

When the appraisal report is complete, the appraiser will provide a written report that includes details about the property and their evaluation of its value. As a homebuyer, it is important to review the appraisal report thoroughly to ensure that it accurately reflects the property's value. Pay attention to the following key elements of the report:?

Property Details: The appraisal report should include details about the property's location, size, and condition.?

Comparable Sales: The appraiser should provide details about the recent sales of comparable properties in the area that were used to determine the home's value.?

Adjustments: If the appraiser made adjustments to the value of comparable properties, it should be clear why those adjustments were made.?

Final Value: The appraisal report should include the final value of the home based on the appraiser's evaluation.?

Why is a Home Appraisal Important??

A home appraisal is an important part of the homebuying process because it determines the market value of the property. This value impacts the amount of money the lender is willing to lend the buyer. If the appraisal comes in lower than the agreed-upon purchase price, the buyer may need to renegotiate with the seller or come up with additional funds to cover the difference.?

This step in the homebuying process has a direct impact on the amount of money you'll be able to borrow, and understanding what home appraisals entail and what to look for in an appraisal report is essential for all homebuyers. By reviewing the appraisal report carefully, you'll have a better understanding of the property's value and can make informed decisions about your home purchase.?

Your lenders can help.?

If you have more questions about this step in the homebuying process, our team would be happy to answer them for you. You can contact the Canvas Mortgage team here.?