What is an appraisal?
A real estate appraisal is the process of developing an opinion of value. This task is performed by a certified or state-licensed professional that will determine if the price offered for the home is aligned with current market trends based on its condition, features, location, and relation to comparable homes in the area. This valuation is an unbiased estimate of the property’s market value and is an important part of the home buying process.
The appraisal is conducted by an appraiser; whose job is very in-depth as they must follow strict licensing and industry guidelines set forth by the Uniform Standards of Professional Appraisal Practice (USPAP). Appraisers are generally local to the area and will know the neighborhood and real estate trends that follow.
Buying a property? What you need to know:
After your offer has been accepted on your Bergen County property there are two essential details that need to be done before you can celebrate closing the deal, the home inspection and the appraisal.
If you are going through a mortgage lender the appraisal is a crucial part of the process. Appraisals ensure that the property is worth its stated value and dictate how much money the lender provides. Once you have gone under contract on the property you are purchasing, the bank will order the appraisal. Unlike when you have a home inspection and are able to choose the person to come to your property the appraiser is assigned by the bank and will be given your contact information to schedule the appointment.
The appraisal will make sure the property has adequate collateral to make the loan worth lending. It also helps to ensure that you as the buyer are paying fair market value. If you are working with a knowledgeable realtor they will have done research prior to the appraisal being completed and will have researched the comps of neighboring homes that have sold.
An appraisal typically takes between 30 and 45 minutes, with additional work done behind the scenes. Here is what is reviewed during the appraisal:
â—¾ Location: Where the home is located can have an incredible impact on its appraised value. This is more than simply the town it’s in but also its neighborhood and lot location.
â—¾ Size and room count: The appraiser will closely examine the interior and exterior of your property. They will measure and take note of the square footage and document how many rooms there are.
â—¾ Overall condition: The overall condition of the house will be noted, including the age and construction materials used. It’s vital to update any flaws in construction materials before the home inspection and appraisal.
â—¾ Community amenities: An appraiser will note your neighborhood and its amenities, including schools, parks, lakes, nature preserves, beaches, shops, and restaurants.
â—¾ Comparable properties: An appraiser will review all sales in the area but will select three to five homes in the neighborhood that are most similar to get a better idea of past listings and sale prices. This information aids their assessment of the property being sold. It is important to note that these comparable properties should be the same style as the home that you are buying. You would not want to compare a ranch style home to a colonial.
What should a seller know?
You have made the decision to list your home for sale. Before putting it on the market there are certain things you may want to do to make sure you are getting the best value for your home, not all of these are taken into consideration by the appraiser, however, all these tips will most certainly present your home in the best way possible.
Here are several steps that will ensure the best outcome for the home you are selling:
â—¾ Do a walk-through with your realtor: A seller’s consultation is key when listing your home. This is where your trusted agent will be able to discuss with you any suggestions they may have to get the most money for your home.
â—¾ Think like a buyer: Imagine you are a potential buyer of the property in question. Would you like what you saw? Does the home look its best? Home staging is a worthy feat when selling your home and will appeal to buyers. Some things to note would be changing light bulbs that are out and fixing any faulty fixtures in the home.
â—¾ Boost curb appeal: First impressions are vital to potential buyers viewing your home. Take a hard look at your property’s exterior and address issues like weeds, unkempt hedges, and brown patches on your lawn. Purchase planters with vibrant, colorful flowers for your front yard. Small efforts like decluttering, caging your pets, and ensuring your kid’s toys aren’t strewn about your home are all minor adjustments that don’t cost a dime and will lend to a better perception of your property.
â—¾ Deep clean: Doing a thorough cleaning of your home will undoubtedly pay off. Property value is higher when it’s clean, so take this task head-on. Pay close attention to scuffed walls, cabinet interiors, and ceiling corners. Clean out gutters, make your windows shine, and give your garage floor a good power wash. If you don’t have the time for a proper clean, hire a professional before your home appraisal date.
â—¾ Double-check and safeguard: Ensure there are no safety issues. Address broken windows, missing handrails, malfunctioning carbon monoxide detectors, etc., with your real estate agent. Broken fixtures and appliances will likely result in the buyer requesting the seller to fix them. Check and then check again that everything in your home is in excellent working condition.
â—¾ Gather documents: Documentation — including a list of upgrades, neighborhood information, comps, and a copy of the instrument survey — is not required but is very helpful to give to the appraiser and future buyers. Stay organized and have these ready to expedite the home appraisal process.
What happens if my appraisal comes in low?
Low appraisals can drastically change the home selling process and are important to be aware of whether you are the buyer or the seller. If the appraisal is low, there are four things that can happen:
â—¾ The seller agrees to lower the price of the property to reflect the value on the appraisal.
â—¾ The buyer agrees to pay the difference between the appraised value and the agreed-upon sales price.
â—¾ The buyer and seller agree to a price between the appraised value and the contract price.
â—¾ Neither party agrees to show any movement and the deal falls apart.
Understanding the impact of low appraisals is vital to the process. Your realtor can help you prepare for every outcome.
Are you ready to sell a home in Bergen County and need assistance with comps, fixes, staging, and more? The Lopez Property Group’s esteemed real estate professionals are well-versed in market trends and real estate appraisals. Whether you’re selling a home in Ramsey or property in the surrounding Bergen County area, Rod and Lauren Lopez can guide you through the process and ensure you receive optimum value when selling your home.
