What You Need To Know About Real Estate Appraisals
What You Need to Know About Real Estate Property Appraisals
A real estate appraisal is an estimate of the market value for a particular property completed by a qualified and professional Real Estate Appraiser. In North Okanagan real estate at the end of 2021, we were seeing most buyers who relied on a mortgage for their purchase require an appraisal. It is important to know if you will need one for your purchase - as it can affect the time you need to make one happen.
The reason why your appraisal is so important is that most lenders require a real estate property appraisal to be completed prior to giving the final approval on your mortgage. ⠀
The property value is most often determined by a direct comparison approach; meaning the appraiser will look for recent sales of comparable properties in the area. Once they've obtained the details on the recently sold properties that are comparable to the property in question, they will compare the features of those properties with the subject property to obtain a market value.
Here's an example; if a comparable sold property has 4 bedrooms, but the subject property only has 3 bedrooms, a reduction in the comparable market value may be assessed.⠀
Most mortgage appraisals also take into consideration the main house and a limited number of acres of land, excluding outbuildings, then the final property appraisal amount is used to determine the lending value for the lender. ⠀
Did you know, that if your property appraisal comes in lower than your accepted offer price, you’ll likely be on the hook for the difference in value between the two figures?⠀
Questions about your own home buying journey? We’d love to help!