Important of Purchase or Refinance Appraisals
Appraisal Solutions Review & Consultation, LLC (aka Appraisal Solutions), understands home ownership is one of the most expensive assets most people will ever own. It is important to take proper measures to make sure you have a clear understanding of the market value of that asset. Whether purchasing or refinancing, it is important you know the value you have before you.
If you plan on selling your property, through a local professional agent, or listing the property yourself, it is very important you know what the market is currently paying for similar properties. If you sell for too little, you may have given away equity you have earned. That is your money given away just because you didn’t know the value of what you had. If you list for too much, you may not be able to sell your property. No one wants to have their property listed longer than necessary. It takes time and energy keeping the property prepared for strangers to walk through day in and day out. Ugh! You may be thinking that you hired an agent and he or she will do a market analysis to determine the asking price. A few thoughts on this. First, if market analysis was sufficient then why do properties sell for well below as well as well above the asking price. Also, it is very discouraging for the closing process when an appraisal comes in lower than the sells price. Second, one of the top agents here in Salem, recently told me that she has absolutely no idea what to list houses for anymore given the current housing trend. Looking as what others have sold for in the neighborhood doesn’t take into account the market trend or the various amenities. It really is an educated guess. Third, if market analysis was sufficient, lenders would accept them for lending purposes.
This is also true for refinancing. Before going through the process of submitting all your personal data over to a lender only to find later you cannot get the loan due to the appraisal, how about getting the appraisal first! This way, the lender will know up front the best loan to meet your needs since the market value has been confirmed up front! Please note, the lender will still need to order an appraisal that has not been selected by the borrower for obvious reasons, but at least you and the lender have a good idea of the market value before digging in deeper!
If you are purchasing your first or second home, you want to make sure that you are getting a fair price. The sellers typically want to get the most they can. Buyers typically want to get the best deal possible. If you pay too much for the property, then you have voluntarily given away extra money that rightfully belonged to you. If you are not concerned about this, then may I suggest some local charities that would love a donation!? 😊
The fact is, it is common for buyers to be coming from outside the area and have extra cash to throw at a property they really want. This doesn’t mean the contract price reflects market value, it just means they are willing to pay above market value to get the home they really want. Lenders are not going to loan above market value. This is a reason to know the true value of the property.