You’ve found your dream Ventura County home. Now it’s time to cross all your T’s and dot all your I’s before it’s all your own. One of the first items on your closing checklist is the home appraisal. This also happens to be one of the fees buyers pay that you might not have been aware of before now. So, what exactly is that? What happens during it? What does the lender do with after they receive it?
Your Guide to a Ventura County Home Appraisal
What is It?
The home appraisal essentially provides a value assessment of the home and property. A certified third party conducts the appraisal. Your mortgage provider hires them. Lenders use this report to determine whether the home is priced appropriately. If it comes in too low, they may choose to deny the buyer a loan.
What Happens During an Appraisal?
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. They include the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has 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 six months in the area. The final report must include a street map showing the property and the ones’ compared, photographs of the interior and exterior, an explanation of how the square footage was calculated, market sales data, public land records, and more.
How Does the Lender Use the Report?
After it is complete, the lender uses the information in the home appraisal to ensure that the property is worth the amount they are investing. This is a safe-guard 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. If the appraisal comes in below the agreed upon sale price, then the buyer must decide whether to ask for a reduction (which the seller is unlikely to agree to), come up with the difference out of their own pocket, or walk away from the sale altogether.
Dave & Pat Zumbrun, your Ventura County real estate specialists