A good number of banks and other types of lenders typically require an official appraisal before they will bankroll a house. They want to be absolutely confident that they’re not taking on too much risk.
If you come to a decision to go ahead with an appraisal, and it comes back at or higher than the asking value of your desired property, that’s terrific. But what happens if the appraised value comes back under the asking price? Well, it’s not the end of the world, but it will certainly throw a wrench in your transaction.
At this point you have three options: (1) Try to negotiate with your bank (or lender) to take on extra risk (remember, the spread between what they’re loaning you and what the house is worth got smaller), (2) Attempt to negotiate with the seller and see if they’ll decrease their asking price, or (3) Drop the transaction entirely…walk away.
This is why a good real estate appraiser is essential. Their labors can be a big part of a deal being successful or failing wretchedly. Even if you aren’t in receipt of traditional financing through a bank, or don’t require financing at all, you ought to still get the home appraised so you know for certain that it’s worth what you’re paying for it (and hopefully more!).
Locating a high-quality appraiser can frequently be difficult. You definitely want someone who has experience and isn’t fresh out of college. The common rule of “you get what you paid for” is rather often very true in relation to real estate appraisers. It’s best to not “cheap out” on an appraiser and do your proper investigation to locate one that’s great at what they do. There’s definitely a lot of them out there!
Fairly often real estate agents can suggest a good appraiser. But another source is friends. Start asking around and seeing which one of your friends recently bought or sold a property and had a decent experience with an appraiser. Ask for their number. Now wasn’t that simple?
If you don’t need an *official* appraisal, and just would like to “test the waters” and find out what your house is worth, there’s several free internet services that can help you out.
My favorite is What-Is-My-House-Worth (.net, not .com). They’re always swift and friendly and I’ve found that the values they give me are quite often very close to the officially appraised values. No sense is spending cash when you don’t have to, right? Particularly in these economically arduous times.
Learn more about what is my house worth and sell my house.
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