When you plan to purchase a
home, one of the first things that you decide is your budget. This forms the
guide when you consider different options to buy a home. However, how do you
know if a home is priced within your budget? Although a real estate agent gives
you a rough estimate of the house, you cannot blindly trust the valuation. The
house might turn out to be too worn out from within and you might have to spend
additional money getting things repaired. A good solution to avoid such extra
expenses is to get the home appraised by a professional appraiser. The benefits
of getting your home appraised before purchase are too profound to be ignored.
Besides, if you want a home
loan, you cannot get one without getting a home appraisal done. The money that
a lender lends for the home is a partial percentage of the appraised value.
Lenders usually offer between 60 percent and 90 percent of the home value. So,
if the appraisal report of your home sets its value at $500,000, you might
receive around $300,000 to $450,000. An appraisal report provides a kind of assurance
to the lender because in case you cannot repay the money, the lender is sure to
get at least the lent out money when the company auctions the home.
Appraisal vs. comparative market analysis
Appraisal reports are not
the same as comparative market analysis (CMA). CMA is at best a rough estimate
of the home value and is not as precise as an appraisal report. This analysis
emphasizes on factors such as the neighborhood and the properties that have been
sold in the same area as your home. A professional appraiser does a more
thorough job of evaluating the property and ensuring its actual market price.
When you apply for home loans, lenders do not consider a comparative market
analysis report. They consider only a professional appraiser’s report.
Online home appraisals simplify the task
Online home appraisal websites have made the task of valuating your home a lot easier. To estimate
the value of your home, you just have to fill in the different categories
provided on the page and submit the form. Categories include address, city,
province and house details such as number of bedrooms, bathrooms, home area,
house type, parking facility, age of the house and other information.
Based on these factors, the
online calculator does its math and gives you the value of the home. You can
use this value as a guide when you purchase a home. If you choose a reliable
and reputed online home appraisal website, you receive an almost accurate
value. However, experts suggest that you must provide a margin of 5 to 10
percent from the real home value because online appraisers do not visit the
site to look into the condition of the home. In any case, a good online
evaluator provides a good enough estimate to start out with.
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