3 Things That Every Homebuyer Needs to Know About Appraisals

by Diana Hellman 05/27/2018

Ready to purchase your dream home? Before you finalize a home purchase, it may be worthwhile to schedule a home appraisal.

With a home appraisal, a property expert will examine a residence both inside and out. The home appraiser then will offer a property valuation.

In some instances, a home offer may be appraisal-contingent. And if the home appraisal valuation falls below the amount of a buyer's offer, the buyer may request a renegotiated price.

A home appraisal may prove to be an important part of the homebuying process. As such, it is paramount for homebuyers to understand what an appraisal is all about and determine whether to conduct an appraisal.

To better understand home appraisals, let's take a look at three home appraisal facts that every homebuyer needs to consider.

1. An appraiser's valuation is his or her opinion of what a residence is worth.

Typically, a home appraiser will use a broad assortment of housing market data as part of a home assessment. The appraiser also will look closely at a residence as part of the home evaluation process.

Although a home appraisal is based on housing market data and a home assessment, it is essential to note that a home valuation is an appraiser's opinion. Therefore, two home appraisers may examine the same housing market data and the same house and come up with two different home valuations.

2. The homes in a neighborhood may affect the valuation of a residence.

Believe it or not, a home's value may be impacted by those around it. Thus, if you intend to buy a home, it often pays to evaluate the neighborhood to better understand whether a house's value will decline, stay the same or increase over time.

Furthermore, what you spend to improve a house is unlikely to raise a house's value proportionately. And if you spend $20,000 on home improvements, there are no guarantees that these home improvements will add $20,000 to a home's valuation.

3. A home appraisal and a home inspection are two very different things.

A home inspection often is considered a must-have during the homebuying process, and perhaps it is easy to understand why.

During a home inspection, a property expert will ensure there are no structural issues with a home and identify any problem areas. Then, a homebuyer can move forward with a home purchase, rescind a home offer or submit a counter proposal based on a home inspection report.

On the other hand, a home appraisal enables a property expert to evaluate the house in its current state. A home appraiser will compare and contrast a home in relation to others in the area and offer a valuation.

If you need help determining whether to conduct a home appraisal, a real estate agent is happy to assist you. With a real estate agent at your side, you can determine whether to set up a home appraisal prior to finalizing a home purchase.

About the Author
Author

Diana Hellman

 Diana Hellman's passion for Larchmont inspires her more than 20 year real estate practice. As a certified buyer's representative, "The development of a solid and trusting relationship with my buyers and sellers is what I strive for." This success, primarily built on client referrals and repeat business, comes from her knowledge of what makes Larchmont unique: it's school system, recreational facilities, services and the special qualities that pervade this village's atmosphere. A former educator with a background in psychology, Diana knows that people don't want a sales pitch, but rather reliable, timely information. She and her husband have been residents of Larchmont for over 40 years. Her 3 children have attended the Mamaroneck Public Schools. She can give you expert advice with the sale or purchase of your home. Awards/Distinctions Multi-million dollar club- Westchester Board of Realtors International Diamond Society (8 million plus in sales), 5-Star agent in 2024. Gold Award- WBR (5-8 million dollars in sales) Silver Award – WBR (3-5 million dollars in sales) Memberships National Association of Realtors New York State Association of Realtors Westchester Board of Realtors Westchester Multiple Listing Service Community Former executive board member of the Central School Former selection school delegate for election of school board candidates Former executive board member of the Friends of the Emelin Theatre Former executive board member of the League of Women Voters