If you are financially prepared and preapproved to buy a house, you will need to understand that you must get an appraisal completed of the house you are trying to buy before you can close on the deal. The second thing you should know is that the appraisal is a highly important part of the process of buying a house.
What an Appraisal Is
An appraisal is a service you hire out from a person called an appraiser. The appraiser visits the house you are buying and while there, he or she will measure the house and inspect every part of it. After doing this, the appraiser will analyze the findings and will compare the house to other homes that are listed on the recently-sold list in your area. From there, the appraiser will place a value on the house. This is called the appraised value, which represents the value of the house right now.
Why It Is So Important for the Deal
It is required to get a house appraised by the lender offering the loan when buying a home. Your lender will want to verify that the house is worth the amount they are basing the loan on. The appraisal is such an important part of the deal because it can make or break the deal.
Lenders will usually back out of issuing loans on homes when the appraisals are too low. This means that you might not be able to qualify to get the loan if the appraisal comes back lower than expected. The bank might pull out of the deal completely, or the bank may tell you that they will issue you the loan if you come up with more money for the down payment. This is one of the top ways lenders protect themselves when issuing loans.
What You Can Do If the Appraisal Is Lower Than Expected
As the person buying a house, you should think twice about going through with the deal if the appraisal is not high enough. After all, why pay more for a house than what the house is really worth? If you still want the house after this, you could ask the seller to lower the price, or you could simply pay the amount you agreed to upfront and pay more for the down payment.
The appraisal of the house you are buying is a critical part of the home-buying process. If you would like to learn more about appraisals in this process, talk to a real estate agent today.
