What is your home worth?
Whether you are buying or selling your home, you need to know the price. A good realtor can help you select a good price or if you buying they can usually help you determine if the home you are buying is a bargain or a money pit. Do you really need an appraisal?
Most realtors will take into account the given homes condition, features, market and location among other things to determine this.
Well, even if home price seems spot on in the given market, we need to take into account what the lenders thinks. After all, it’s the lender that is forking out the money upfront for you.
How does a Lender analyse your home?
Lenders will use something called an Automated Valuation System. Lets use AVM for short. This is a program or app that was created to give lenders a quick Valuation of a given home to help them decide if they want to lend money to a buyer.
The AVM has a kind of pass/fail setup and if it gets fail, this is when your mortgage broker will tell you that an appraisal is required.
Now your realtor has not done a bad job of pricing or determining the property’s worth. This just means that there is likely one factor such as; the home is on the expensive side of a given area or location so the AVM tells the lender to double check.
What is involved in this? Once the lender requests an appraisal, I get a notice or condition to have one completed before the mortgage can proceed.
What does this mean for you? This means that the seller will have to provide a time to an approved appraiser to come to the house and put a value on the home. Normally they will come in and take some photo’s, sniff around and then compare the property to comparable ones that have sold in the past.
This is a normal step in the process of buying an existing home and you should definitely not be worried about it. It can actually save you a lot of money if the price is wrong and avoiding a major head ache in the future if you are the buyer and come to find out you don’t have all the equity you thought you had.
As always be sure to contact me if you have any questions or if you are looking to get a mortgage at
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