Today’s topic is more technical than the usual real estate chatter: appraisals. We’ll explain what they are and how they impact the value of the home you’re planning to buy or sell in Dallas. Appraisals play an important role in a real estate transaction because unless the home is being paid for all in cash, the transaction can’t happen without an appraisal.
The Appraisal Process
What are appraisals and what role do they play in a transaction? Understanding the appraisal process is key to getting the best deal possible for yourself.
An appraisal is a valuation of property by the estimate of an authorized person; and an appraisal ends after a buyer has been identified for a home. If you’re the buyer, the appraisal will be picked randomly by the mortgage lender from a pool of appraisers—and this will be someone that the mortgage lender cannot have communication with directly. It is assigned this way because the appraiser’s job is to verify the value for the lender.
The government has certain regulations they put on the lenders and on the lending process, including the appraisers. They tell the appraisers how much they can adjust certain values (up or down) and what things they can adjust based on, which results in a cooling effect on values when it comes to securing a mortgage or home prices going up.
Many times, the house that sold for more than the home it was comparable to a few months ago can’t get an appraisal because the appraiser can’t make any huge adjustments outside the parameters that they set several months prior.
This results in you getting a low appraisal, meaning you have to be ready to fight that outcome by discussing with the appraiser the reasons why it could be worth more. This can be tricky because you’re in conversation with the appraiser, knowing that they are limited by certain government regulations on how much they can increase an appraisal above a certain property.
Helping Hands Home Advisors
Alternatively, our process at Helping Hands Home Advisors is very straightforward. We look at the location of the property, what repairs are needed, the current condition of the property, and values of comparable houses sold in the area recently. As you probably know, home values have taken a huge hit in the last five years and most areas still haven’t seen prices come back up. We take many pieces of information into consideration… and come up with a fair price that works for us and works for you too.
If you’re thinking about buying or selling, make sure you have a professional on your side to help you navigate through this process. Our team of experts at Helping Hands Home Advisors, for example, would certainly be happy to assist. 😌 Want to know more about the options we provide home sellers in DFW? Give us a call at 214-466-6771 today!