If you are borrowing money from a lender to purchase a house, like most of us do, you will need an appraisal of the property you want to buy. It's a requirement.
An appraisal is an educated guess of what the home is worth -- and the bank or mortgage company needs to know the real value of the home to compare it to the price you have agreed to pay for it.
Your lender will arrange for the property to be appraised by a certified third party. As the buyer, you won't be there.
The appraiser will take a look around and provide the lender with a report about the home's location, floor layout, upgrades and condition of the yard, among other things.
A positive appraisal assures the lender that the home is worth more than the amount of the money you are borrowing from them. The positive appraisal is important because the lender doesn't want to lose money if you default on your loan and they have to sell your house to recoup the money. So, if the home's appraisal value is at or above the value of the purchase agreement, your loan will be approved and you are ready to close on the purchase.
bbbIf the appraised value of the home is less than the agreed-upon selling price, however, the lender will deny the loan. That means that you and the seller -- with the help of your real estate agent -- must negotiate an acceptable lower price. And if you can't agree on a lower price, you terminate the contract.
More details on home appraisals is available here.
The agents at Tyre Realty Group will help you with the purchase of a home in Greenville, Winterville, Ayden and the surrounding area.