Buying A Home In SWFL? Here’s Why You Need An Appraisal
Of all the hoops you have to jump through when buying a home, often the one that seems to make the least sense is the appraisal. Your realtor has negotiated with the seller, you’ve settled on a purchase price, you’ve had the home inspection done – so why do you need to pay for an appraisal?
It all has to do with mortgage approval. The house is the collateral on the loan you’re taking out, so the lender has to make sure that its value is appropriate to support the amount you’re borrowing. To get an accurate estimate, an unbiased third party will inspect the house and write up a report detailing the value of the house.
Frequently Asked Questions About Home Appraisals
People often misunderstand the reason an appraisal is needed, as well as how the appraiser calculates the value of the house. Let’s clear up some misconceptions.
Who can complete an appraisal? Real estate appraisers are regulated by the Florida Real Estate Appraisal Board. A Certified Residential Appraiser or a registered trainee must complete the report.
How does the appraisal process work? First, the appraiser will visit the property. They must inspect every room in order to verify all of the home’s features as well as the condition the house is in. After the inspection, the appraiser will prepare a report. There are a few different approaches to estimating the market value, but the one used most often is the sales comparison approach. The appraiser will look at recent sales of houses similar to the one you’re buying and make any necessary adjustments based on the size of the property, the location, any upgrades that have been made, etc., and calculate the value of the house based on that comparison.
Why can’t the realtor do the appraisal? Realtors can certainly estimate the amount a house will sell for based on their knowledge of the market, but since they have a vested interested in the sale of the property, they can’t perform a formal appraisal. Lenders require a third party to do the valuation in order to avoid any conflict of interest.
How much will this cost? The fee will depend on the size of the property, the estimated value, and sometimes the location (for example, rural properties are often more expensive to appraise than urban ones). The appraiser or your mortgage broker will let you know what the cost will be before they begin the appraisal.
Let The Link Team Guide You Through The Purchase Process
There are several steps in the process of buying a house in Naples, Bonita Sprints, Fort Myers, or Estero, from making an offer to getting an inspection to having the house appraised. Fortunately, you can call on the Link Team’s extensive experience in the local market to get you through all these steps with as little stress as possible. Call us today at (239) 357-5058 or get in touch through our website.