Arizona real estate: Understanding home appraisals
Understanding home appraisals and how they work may help ensure prospective buyers and sellers in Arizona are prepared for the process.
Most prospective homebuyers and home sellers in Arizona are aware that the home appraisal is an integral aspect of the process. Many, however, do not fully comprehend what it entails. To help ensure they are prepared, it is important for people who are considering buying or selling to understand what happens during a home appraisal.
What is a home appraisal?
A professional property assessment, appraisals provide an unbiased estimation of a home’s value, and are required by most mortgage lenders. These analyses determine the worth of the property for the financial institution or lender. This gives them an idea what the home, as the loan’s collateral, would sell for if the owners defaulted on their mortgage payments. As such, lenders typically will not agree to loans that exceed the home’s appraised value. For this reason, it is to the benefit of all those involved when the property’s estimated worth is in the same range as the negotiated sale price.
What is the appraisal process?
Home appraisals are often scheduled by the potential lenders prior to closing, as well as by homeowners who want to know their property’s value before listing it on the market. Depending on factors, including the condition of the home, the inspection may take anywhere from 15 minutes to several hours. Upon completion, the appraiser puts together a report that is delivered to the lender or homeowner, often within about a week’s time. Provided the estimated value and purchasing price are in line, the real estate sale may be allowed to proceed. If not, the owners and prospective buyers may need to resume negotiations, or the buyers may have to look for another property.
What do home appraisers look for?
As home appraisers go through properties, they analyze the interiors and exteriors. Unlike home inspectors, however, they are not going through homes with a fine-tooth comb. Rather, they take into account such factors as the lot size, the home’s square footage, and the number of bathrooms and bedrooms. Appraisers may also give some attention to more subjective factors, such as the home’s exterior look and how well it is or is not maintained. Forbes points out that those looking to put their homes on the market should have all the property’s major systems serviced to ensure everything is in working order.
Seeking legal guidance
Whether buying or selling, those in the Arizona real estate market are often thinking about the big picture or daydreaming about what the future will hold. However, there are numerous complexities involved, which may complicate the process. Therefore, people who are in the market to purchase a new home or sell their current property may benefit from working with a lawyer. An attorney may guide them through the process, including helping them understand their obligations and options.