You and your buyer have agreed on a purchase price for your home. All the bank's paperwork is ready. All they are waiting for is the appraisal to be finished.
Sales Contract
One the day of the appraisal, there are many facts the appraiser will use to complete his report. The number one factor used in determining the appraised value is the home's worth. The worth of the home is established by the sales contract and the amount of money the buyer has agreed to pay the seller.
Market Value
When a home is sold, the bank requires an appraisal to verify the value of the property. A record of these sales are held at the county courthouse. In general an acceptable comparable home must be within 15 miles of the home, in a similar community, and occurred within the past 6 months. The closer the homes are together and the more recent the comparable sale the better the comparable is for the establishing value.
Home appraisers will also look at the features of the house when determining its appraised value. Things like square footage of the living space, condition of the house, age of the house, size of the lot, and the level of craftsmanship of the house all go into determining what makes a good comparable property. Generally, the home appraiser will use three comparable properties to help determine the appraised value of the house.
Final Thoughts
As you prepare for the day the home is being appraised, there are a few tips you can use to help the appraiser out. Make sure the home is clean and clutter free, cut the grass, trim the trees and shrubbery, and have a copy of the sales contract readily available. Be prepared to discuss any repairs and renovations with the appraiser.
Hubert Miles is the founder of Waterfront Houses USA, an online listing service that provides Coastal Properties and Coastal Property For Sale in the US and the Bahamas.
