An appraisal can be a scary thing! Is the home going to be worth what I’m buying it for? Or, is my appraisal going to be high enough so I can get rid of my Private Mortgage Insurance? Some people are wondering what the heck an appraisal is!
When you buy, sell, or refinance a home, it must have an appraisal completed to ensure the home is worth what you are purchasing it for. The only instance where you wouldn’t need an appraisal is if the buyer is paying cash and not taking out a mortgage.
An appraisal can be very exciting if you find out your home is worth more than you are buying it for, but can also be detrimental if it comes in under value and both parties can’t agree to lower the price.
It’s important for your Realtor to take some measures to help with this process. Because the Phoenix Real Estate market is a sellers market currently, sellers are pricing their homes higher to see what kind of offers they can get, and they are getting them! Some agents are encouraging their clients to offer above list price in an effort to secure the home against multiple offers. However, this plan can backfire badly! It’s always a good idea for your Realtor to research the last 90 days of comparable home sales when putting together an offer to be proactive and avoid any appraisal headaches. A great listing agent will have a conversation with the appraiser to go over the comparable home sales, best features of the home, and perks of the neighborhood in an effort to educate them on why the purchase price should be supported.
We recently started the process of refinancing our new build home in Eastmark. Because the home is only 6 months old, there are not many listings on the Multiple Listing Service to run a comparable home search. This lead the appraiser to just grab homes in the same size range that weren’t truly a match to our home.
Here are 5 Things I Did to Help the Appraiser Determine Our Home Value:
1) Pulled all of the park facing homes that closed in the last 90 days that are model matches.
2) Compared lot sizes and similar features
3) Listed all upgrades that we’ve done to the home after moving in
4) Attached a sheet with all of our upgrades from the design center
5) Provided a link to the builder website to show the cost to build our exact model
As always, if you are thinking of moving in the near future please feel free to reach out so we can chat about what’s best for you!
Jen Duncan a.k.a. JD a.k.a #NewBuildNinja