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You already know real estate is all about buying and selling property. People search for a home, obtain financing, make an offer, and buy the home. But how do you know how much a home is worth? That is where real estate appraisal comes into the process. A real estate appraisal is what an expert determines that your home is worth. This is the number that lenders depend on to decide if they will approve a loan or not.
An appraisal is not the same thing as the asking price of a home. Although the numbers are often close, they are completely different things. The asking price of a home is simply the price the seller is asking the market to pay. The seller and his or her real estate agent often decide this price together. People can make offers that are lower than the asking price, and sometimes they are accepted.
The bank that is offering the buyer a mortgage commissions a real estate appraisal. The bank does not want to overpay on a house. They are issuing the loan for the house, so if something goes wrong and the house goes into foreclosure, they will become the owner of it. They have independent appraisers that go to the home and make sure that it is worth the price that is being paid for it.
The appraiser looks at the condition, size, and amenities of the house. He or she also considers the size of the land, the neighborhood, and the quality of the school district. He or she also considers the current housing market and what similar homes in the area have recently sold for. The appraiser considers the negatives too, like if a home next to a freeway. As you can see, there are a variety of factors that affect the appraisal of your home, and many appraisal agents depend on years of experience to get an accurate estimate of its worth.
It usually takes less than an hour to have your home appraised. After the appraiser is done at your house, he or she goes back to the real estate office and compiles all the data to get a final number. The appraiser then sends the final appraisal back to the mortgage lender. The buyer of the home usually foots the bill for the appraisal. The bill usually comes to approximately $300-$500. The buyer pays this fee whether he or she closes on your house or not.
The appraisal is an essential part of the real estate process. Now that you understand it, you can feel comfortable when the appraiser comes calling at your house.