When you are applying for a mortgage, you might want to avoid an appraisal because you are afraid of an under appraisal. If the seller is going to list the house for rupees 35,00,000 and as a buyer you ask for rupees 27,50,000, and eventually you settle for rupees 30,00,000. A week before closing the sale, you are getting an appraisal for rupees 26,50,000. Appraisals are done based on the comparable market sales.
The value provided in the appraisal will be the maximum amount that the bank or mortgage company will be willing to lend. So, who is going to make up for the short fall of rupees 3,50,000? This is a very common, yet significant problem for which most buyers try to avoid a home appraisal when applying for the mortgage.
After the appraisal, the seller would not want to sell the property for less than the previously agreed amount, since he had already come down in price. The buyer would not be having the cash difference, and they will not be willing to pay anything more than the value provided by the appraisal. Eventually, the sale comes to a halt.
A under appraisal will leave the buyer give up on the dream home. The seller will face an even big problem after the contract cancellation, because the price given by the appraiser will leave a permanent impact on the property and it will greatly influence the selling factor of the property.
While it is not possible to avoid a home appraisal when applying for a loan, you can ensure that you are not working with poor quality appraisers. If you are the buyer:
- Working with competent appraisers will fetch the right value for you and your lender.
- If you work with good appraisers, they will appreciate if you provide with the details of the recent sales in the area, and you can inform them about any kind of foreclosure on a property.
- Good appraisers know how to dispel myths associated with the rates of a particular property.
If you are the seller of the property, you can:
- Get the appraisal done before listing the property for sale.
- An appraisal will lead you to providing a realistic price for your property.
- If the appraisal is very low, you can question the low pricing. If the appraiser is able to see that there is some kind of overlooking they will take the missed facts in to account before deciding on the final pricing. They will however, not agree upon ridiculous assumptions.
- You want to make sure that the appraiser is not overlooking the upgrades and luxury additions to your custom built home.
- Some mortgage lenders tend to deliberately undervalue properties. You can choose to approve or disapprove the mortgage lender your seller is working with.
A home appraisal is unavoidable, but you can definitely help with avoiding the overlooking and you can reinstate the essential value with meritorious facts. An unbiased approach in determining the price of the property is actually a good thing for sellers and buyers alike.Contact More indialoanbazaar.com