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Whether you are buying a property, selling a property, or trying to refinance, along the course of your real estate journey, you are going to need to get an appraisal.
However, while most people have a general idea, many need to learn what exactly a real estate appraisal is and why it is so crucial to various parts of the real estate investing process.
So, if you would like to learn why getting a real estate appraisal is essential and how to navigate the appraisal process, continue reading and let me show you.
But first, if you want to ensure that the appraiser you work with is one your lender trusts, click the link below for a free strategy call, and we can discuss your options to satisfy your lender’s conditions.
What is an Appraisal?
Appraisals are commonplace in many different industries and types of transactions, including real estate. Essentially, an authorized professional’s valuation of an asset establishes a reliable benchmark to judge its value and financial potential.
These are traditionally used to establish the property’s ‘fair market value’ and determine a value that can be used for loan calculations, tax purposes and more.
In real estate, some key factors that play into an appraisal include the home’s condition, neighbourhood, age, and critical features.
An appraisal is also used in the event of mortgage default or foreclosure to ensure the property is accurately valued for the eventual sale.
Appraisals are also valuable during a refinance because they allow any appreciation the property has experienced to be converted into tangible equity. After all, until you have an appraiser confirm the value a home has gained over time or through renovations, the only sources of usable equity your property would have available are your down payment and principal mortgage payments.
Before You Get an Appraisal
Now, before you get a home appraisal, you must take the time to talk to your mortgage agent to learn about your lender’s policies. With many lenders, particularly on the commercial end, there are lender-specific lists of appraisers and appraisal companies that the lender is willing to work with. To talk with an expert click the yellow button below.
So, it is always better to ask first to avoid paying for an appraisal that your lender will not accept.
What Can You Do About a Low Appraisal?
Sometimes, an appraisal comes back lower than you were initially hoping for – or lower than you need.
While sometimes that low appraisal may be accurate, there are a few things you can do if you want to get a higher result.
First, you can get a second appraisal and hope the new value returns where you expected it to be.
Alternatively, you can appeal and dispute your first evaluation by identifying comparable properties that support the higher valuation for your property.
If You Are Ready to Invest
If you are ready to invest, let us help you get started by finding an appraiser that you and your mortgage lender can trust to give the most accurate valuation for your existing and upcoming investments.
To get started today, all you need to do is click the link below for a free strategy call with our mortgage team at LendCity.