If you are purchasing real estate (or have in the past) you’ve heard the word “appraisal.” Whether you are on the buying or selling side, the appraisal will have an impact. I have found there is a lot of confusion about what an appraisal is, how it affects a transaction and what kind of control there is over it.
Appraisal (as defined by the NMA -National Mortgage Alliance): An appraisal is a written estimate of a property’s market value completed by an appraiser, a professional objective third party. The value is based upon a market analysis of recent sales for similar properties in the area and the property’s physical condition.
The main objective for a professional appraisal in most real estate transactions is to provide the lender with the information to know how much they can safely loan on a property.
Low appraisals have been an issue with many contracts in the last 5 years. According to the National Association of Realtors (NAR), “Twenty-one percent of NAR members in January reported delays on contracts, and thirty three percent said they had contracts fall through. An increase in the past year of contract cancellations or delays has been blamed on more lenders declining… Continue Reading
