When buying a home an appraisal is required by the lender prior to loan approval . The appraisal will document that the home is worth the amount you are borrowing. This ensures the lender can sell the home to get their investment back if you default on the mortgage.

The appraisal cost is usually written into the closing costs. Most appraisals are paid for by the buyer. Sometimes, sellers agree to pay the cost of the appraisal in an effort to sell their home faster. The cost of the appraisal varies by area, but generally it is a few hundred dollars.

It is important to have the appraisal done by a reputable appraiser. You can find a good appraiser in your area by asking a real estate agent who they have used. You can also ask other home owners to recommend someone. It is a good idea to check the reputation of an appraiser prior to hiring them. There are several organizations that can aid you in your research  including The Appraisal Institute and the National Association of Real Estate Appraisers.

The appraiser will complete all the necessary paperwork to for the appraisal. This gives you a great itemized worksheet regarding the value of the home you are wanting to purchase. The appraiser will base the value of the home property location, quality of the home, on the market analysis, what the home has to offer.

Appraisals are a common part of the home buying process. This affords you the opportunity to find out if the home you are looking at is worth the price the buyer is asking. You can use the information to help you negotiate a lower price if the appraisal is less than the asking price. Lenders generally only approve a home loan if the appraisal is equal to or greater to the cost of the loan.  

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This entry was posted on Monday, May 5th, 2008 at 5:31 pm and is filed under appraisals, lending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.