Home Appraisal Pros And Cons
- Verifies that the seller has not overpriced the house.
- Protects the buyer against losses.
- Takes up a lot of time and money.
- Who can skip home appraisals?
Should I Get An Appraisal Before Buying A House?
Home appraisals are an important part of your home buying process. It ensures that you pay a fair price for the home and protects you against any losses. However, sometimes it feels like a burden and is an additional cost, which leaves many home buyers wondering, “Should I get an appraisal before buying a house?”
Something all buyers should understand questioning whether they should get an appraisal before buying a house is that home appraisals are actually required. The lender will order it on your behalf, unless you get an appraisal waiver, in which case it’s left up to the buyer.
However, before you skip the appraisal step, you need to understand it protects you by ensuring that the value of your loan is not more than the value of the home you are buying. Getting the property apprised helps you make the right decision when getting a mortgage and saves you a lot of money.
How Appraisers Determine The Value Of A Home
An appraiser will complete a written estimate of the targeted property’s market value. They consider various factors regarding the property and sale prices of similar homes in the areas. Some of the factors they consider include;
- Age, size, and condition of the house
- Upgrades or improvements
- Health and safety hazards
- Visible defects.
- Number of bedrooms and bathrooms
- Presence of a pool and its condition
- Condition of the foundation and chimney
- Total land coverage of the house
- Curb appeal and landscaping quality
- Condition of the HVAC system
They also factor in the cost you would have used to build a home similar to what you are buying.
In some cases, you might find a seller who does not allow you to independently appraise the home. In that case, your appraiser can conduct an exterior inspection or “drive-by appraisal” of the home. For that, the appraiser can look at the home’s exterior condition, neighborhood, and grounds, plus curb appeal.
They can also look at public records of the home like court records or listing service records, which will show the house’s characteristics like size, age, and the number of rooms. However, without specific information on the house’s interior, the appraiser may not give the true value of the home.
Who Can Skip A Home Appraisal?
People find it very hectic because of the additional cost of an appraisal and the time it takes to complete the process. Since 1994, the government has indicated that people buying homes worth $250,000 or less could skip the appraisal process. However, that limit has recently increased to $400,000.
To ensure that you get your mortgage approved, you need to get the house appraised because many mortgage lenders require it regardless of the value of the home. That gives them protection against losses if the borrower defaults.
There is however something called an appraisal waiver issued by your bank. Typically, your bank will make you get an appraisal. Recently, in an effort to speed things up, they have been offering an “Appraisal Waiver”. About 15% of the time your loan file might be given an appraisal waiver, meaning that you are not required to provide an appraisal. Appraisal waivers are unpredictable on purpose, but typically the higher your down payment and credit score, the higher likelihood of receiving an appraisal waiver. Homeowners that are refinancing have an even higher likelihood of receiving an appraisal waiver.
But what if I get an appraisal waiver, but still want an appraisal? In this case, the buyer can find their own appraiser and hire them to appraise the home. Many buyers will want to do this, especially if the purchase of the home is contingent upon the home appraising for not less than the purchase price.
How Does An Appraisal Affect Your Mortgage?
While you and the seller may agree on a price for the home, your mortgage lender might not consider that enough for them to give you the mortgage. They might require an estimate of the home’s value from a professional appraiser.
Lenders also use the sale price and appraised value of the property you are buying to decide the amount of money they will lend you. They compare the two and decide on the amount depending on whichever of the two values is lower.
While the appraisal process has its advantages, it could also cause a delay in the closing process of the mortgage. According to the National Association of Realtors, appraisal issues result in about 16% of all mortgage closing delays. These issues result when a realtor values a home under its sale price, where you and the seller have to agree on an adjustment.
Do Mortgage Borrowers Need Appraisals?
Many clients who want to get a mortgage for your home often wonder, should I get an appraisal before buying a house? Appraisals have their advantages and disadvantages for people who are buying homes using mortgages or cash.
However, if you want to get maximum protection against losses and get approval from many lenders, you must put in the extra time and money to get a home buying appraisal.
How Much Does Home Appraisal Cost In Utah?
To understand how much a Utah home is before buying it, you need professional home buying appraisal services. However, you need to get the best price for the services. If you want to buy a single-family home, the average appraisal price ranges from between $450 and $675.
Some of the factors that affect the cost of the home buying appraisal services in Utah include;
- The size of the home- The bigger the home, the higher the price.
- Location- If the house you want to buy is in a desirable location, like close to the beach or mountains, the cost goes up more than houses in other locations.
- The uniqueness of the home- If the home you want to buy is unique and there is not another home in the neighborhood that looks like it, the cost will be higher than that of appraising normal average homes.
Who Pays The Home Buying Appraisal Fees?
The buyer will pay for the appraisal in their closing costs, unless the lender they select is offering a free appraisal, or someone else offers to pay for the appraisal for them. In many cases the lender will require a check up for the cost of the appraisal. In other cases, the lender will pay for the appraisal up front, and then collect from the buyer in the form of increased closing costs.
Are There Free Quotes For Home Buying Appraisal?
This depends on the company that you approach to appraise the home for you. Some companies charge for the estimates, while others don’t.
If you are in Utah and are looking for the best home buying appraisal services, ExcelAppraise is the best place to look. We value our clients and always want to protect you from losses you may incur when buying a house.
Regardless of the size or condition of the house, we will come to you and help you get the actual value of your home. We are also flexible, which allows us to adjust our responses and services to the individual needs of your customers.
If you want to get a free quote for the best home buying appraisal services in Utah, call us at 1-801-882-2292.