An appraisal is a term used to define the valuation of real estate and other valuable assets. Basically, it refers to the estimated value of the given property by an authorized person. The main purpose of the appraisal is to find out the selling price for the real estate or an antique. It is mainly used for taxation and other such purposes. Appraisals are most common in real estate transactions. When a buyer decides to invest in the real estate, they are supposed to hire an appraiser to get the property inspected and its value checked.
Only a professional appraiser can tell you the accurate value of the property. Not only the buyers, but the mortgage lenders also demand property appraisal before funding your transaction. If the value of the home is below the purchase price, for example, then the moneylender or the financial institution will not accept the Home Loan application. That’s one of the reasons why it’s important to get your home appraisal done before applying for a mortgage or signing the property deal. There are many methods used for evaluating the value of your real estate.
As mentioned earlier, the homeowner or the buyer has to hire an appraiser when dealing with real estate. You may also need to hire an appraiser when refinancing your home mortgage, i.e. when your current home loan is updated with the latest rates and duration. An appraisal is done to figure out the current value of your property, its age, condition, and other features. Not only does it ensure that the house is worth the money the buyer is paying for it, but any lender will take the value of your property into consideration when lending money. After all, no Bank or financial institution will want to loan more money to the borrower than what’s required.
If the borrower is unable to pay the loan or they get insolvent, then the bank will consider the appraisal of the property to calculate its valuation and sell it to repay the loan. If the borrower is unable to repay the loan, the bank will hold the right to sell the property to recover the loss. It is, therefore, important for the bank to get the appraisal so that it can rest easy knowing that it will be protected in case of the borrower’s Default.
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Appraisals are not only for homes, but they are common for just about any valuable item. It can be your grandparent’s precious jewelry or some antiques that hold a significant value in the Market. All sorts of collectibles are to be evaluated by a professional. Another important thing to note here is that the appraiser’s valuation is going to be fair. They charge a flat fee per hour for the valuation of your property. You could also check the value of your antiques or items through magazines or appraiser’s websites. You will be charged a small fee, around $10.