A property appraisal is one of the early steps of buying a home, and it is also a mortgage requirement. As a buyer, however, you should show real interest in the appraisal because it has far-reaching significance for you. Here are the specific reasons all buyers should be interested in getting the right appraisal for their prospective purchases:
It Helps With Mortgage Application
If you are buying a home on a mortgage, as most people do, then you should know that the appraisal is one of the requirements your lender will insist upon. This is because the lender is investing in the house by loaning you the money. In the worst case scenario that you don't service your mortgage, the lender has the right to recoup its investment by repossessing the house. Your lender won't be able to get back its investment if the house was overpriced in the first place. Therefore, a good appraisal is one of the steps to getting your mortgage application approved.
It Ensures You Are Not Overpaying For the Property
Another reason you should be interested in a fair appraisal is that it prevents you from overpaying for a home. In fact, this is one of the reasons you should have any home you want to buy appraised even if you are not applying for a mortgage. For example, if you skip the appraisal process because you are buying on cash, you might experience buyer's remorse if it turns out that the house wasn't worth as much as you paid for it.
It Ensures the Transaction Doesn't Fall Through
Few things are as disappointing as navigating a home purchase process only for it to fall through at the last minute. Unfortunately, that's what you are looking at if the appraisal figure is much lower than the listing price. In this case, there are several reasons the transaction might collapse. For one, the transaction may fall through if you can't get the mortgage to buy the house. Secondly, the transaction may also fall through if you decide to look for another home because the current one seems overpriced.
It May Give You a Bargaining Chip
Lastly, you may also use a good appraisal as a bargaining power to get the seller to lower their price. For example, if the appraisal returns a lower figure than the listed price, it provides you with one more ammunition you can use to get the seller to lower their price.Share