A Valued Home Deserves A Great Value
Do you value your home and want to know its actual worth? Or are you curious about how to determine the right price to sell it for? CoreLogic’s data analysis reveals that home prices typically increase by 4.9% each year. But navigating the correct value can be challenging without adequate knowledge, particularly in important transactions such as Real Estate. Studies from the National Association of Realtors show that 15% of Homeowners struggle to determine the correct price, and at least 7% have difficulty understanding the accompanying paperwork.
This is when Professionals, like Strike Realty as a good example, step-up and give the proper guidance on how it should be correctly Appraised. Statistics also reveal that around 89% authorizes a Real Estate Agent or Broker for both buying and selling properties as it gives them confidence in ensuring a smooth transaction. So why take the long hard way in trying to learn the value of your property when there is someone knowledgeable and willing to assist you on your Real Estate journey.
This Article is here to help you understand how Appraisal works while making sure that you are getting your Home’s worth.
What is an Appraisal?
Appraisal is the process of determining the correct value through extensive property research and reporting. Financers, such as Banks, usually hire an Appraiser to know how much they should finance a certain property. The Appraiser will provide all the necessary information such as square footage, number of bedrooms and bathrooms, property condition, renovations done, and so on. These details will support the valuation process.
According to NAR, the majority of Sellers sold their homes at 100% from their actual listing price, and 32% reportedly reduced their asking price. This underscores the importance of an Appraisal in achieving the correct and desired property value. Since 2018, the Real Estate Appraisal Industry has grown on an average of 2.5% annually according to IBIS World.
How do Appraisers appraise?
The first step in appraising is comparing existing properties, also known as Comparables. Find similar properties near your own and make necessary adjustments by selecting those with the best similarity. Compare property size, bedrooms, bathrooms, year built, condition, and other details. Adjust details for features like garage type, flooring, windows, cabinetry, pools, and location specifics like corner lots or cul-de-sacs. These nuances significantly affect whether the property should be valued higher or lower than its comparables.
Moreover, any renovations and modifications should always be documented, and a copy of these records should be provided and noted. This informs the appraiser of recent property changes, which is crucial for accurate evaluation. Always remember that even small changes can make a difference when it comes to appraisals.
How to prevent getting a low appraised value?
One of the most important parts of preparing any property is ensuring the property is clean, neat, and tidy before an appraisal. A thorough deep cleaning and decluttering are necessary to make it look nice and presentable. Hiring professionals for cleaning, repairs, and minor renovations significantly boosts property value, making it look fresh and welcoming.
Additionally, Homeowners should always keep a copy and proof of recent modifications or renovations and provide them to their agents. The Agent will provide this information to the Appraiser to verify recent improvements and their extent.
If the appraisal is low, you can request a copy of the report. Check for errors or overlooked details in the appraisal or comparables to potentially increase the value. As of 2021, around 38% of home purchase appraisals are being challenged by either the buyer or the seller according to Worldmetrics. If the value doesn’t increase, negotiate with the Buyer to cover the difference themselves. If they refuse, you can choose to reject the low offer.
Appraisal is one of the most critical factors in the success or failure of Real Estate transactions. Getting the right price will surely make an Agent trustworthy and reliable, as this is one of the most important steps. Moreover, an appraisal provides useful information about the property and describes what makes it valuable. This is why appraisals are mostly handled by Professionals, as it requires careful and meticulous analysis that can impact the entire deal. Agents and brokers must prioritize the homeowner’s interests and ensure they get the best value for their homes.
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