Buyer Tips | Seller Tips | General Tips | Real Estate Glossary
Before your mortgage
application is approved, the lender will order a professional appraisal of the
home to make sure that the agreed-upon price is in line with the current market
value of the home. The appraiser's price will be based on the complexity of the
appraisal and the time required.
A professional appraiser will choose the
appraisal technique that is applicable to the particular property to arrive at
an unbiased opinion of the value. One technique is to look at comparable homes
in the area that have sold for the contractual price within the last six months.
The price of each comparable home is adjusted to reflect the differences between
it and the house being appraised. If there are a number of similar properties
that have sold recently, the appraiser's job is easy. It is more complicated to
arrive at the appraised value if your home is located in a rural area or a
diverse neighborhood. The appraised value will usually be very close to the sale
price. If the appraisal comes in lower, the Realtor may be able to provide the
appraisers with additional information on recent sales which will result in
increased value.
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