You’ve found your dream Lake Havasu home. Now it’s time to cross all your “T”s and dot all your “I”s before it becomes all your own. One of the first items on your closing checklist? The home appraisal. So, what exactly is that?
Buyer’s Guide to a Home Appraisal
The home appraisal is essentially a value assessment of the physical home and the property it sits on. First, a certified third party conducts the appraisal. Then, the report generated is used to determine whether the home is priced appropriately.
During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. They adjust the value upward for things like a deck, a view, or a large yard. The appraiser will also compare the home to several similar homes that were sold within the last few months in the area.
The final report must include a street map showing the property in question as well as the ones used for comparison. The report also includes photographs of the interior and exterior, an explanation of how the square footage was calculated, market sales data, public land records, and any other pertinent data.
Once completed, the lender uses the information found in the report to ensure that the property is worth the amount they are investing. This is a safeguard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
According to Manta, an appraisal costs an average of $343. However, the cost may vary depending on the size of the home. The buyer pays for the report themselves.
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