A lot of people don’t understand exactly what appraisals are and how they work in regards to the real estate transaction.
In this video Robert discusses what appraisals are for, and how they work in the real estate transaction. Essentially, appraisals are a tool used by lenders to verify that the house is worth the contracted purchase price. Mortgagecompanies don’t want to give a loan to an overpriced home. For residential homes, appraised values are determined primarily by comparing the subject property with three other recently sold homes.
It used to be that appraisals in Logan Utah almost always came in at contract price value. However, since the housing bust, appraisal guidelines have gotten much stricter.
When making an offer on a home for sale, it is very important that one of the conditions for contract cancellation is the appraisal meeting value. It’s also important that real estate agents are on top of these deadlines to make sure home buyers are protected in the event that the appraisal comes in low.
With the way appraisal guidelines are now, there are many instances where market value just won’t match appraised value. There might be several people willing to pay a certain price for a home, but because the appraiser has no homes in which to compare it with, the value for the lender can’t be verified.
