A home appraisal is an important aspect of the closing process in a real estate transaction. But what hurts a home appraisal? There are various factors that negatively impact an appraisal. Let’s find out what causes a low appraisal and how to avoid it.
What is a Home Appraisal?
A home appraisal is the process by which a certified real estate appraiser determines the fair market value of a house. It is an impartial estimation of a property by a third neutral party which does not have any vested interest in the transaction.
When To Get An Appraisal?
A mortgage lender should get an appraisal to safeguard themselves against loaning the buyer more than what the house is worth. A lender may also get a house appraisal done in the case of a refinance before finalizing the terms of the revised mortgage.
A home buyer should get an appraisal done to ensure they don’t end up paying more than the actual market rate of the house.
Who Pays Home Appraisal Cost?
The home buyer pays the home appraisal cost in a purchase-and-sale transaction. However, the buyer may ask the seller to bear these expenses as a part of the seller’s closing costs.
In a refinance transaction, the home owner pays the appraisal fees.
What Hurts a Home Appraisal?
There are multiple factors that adversely affect a home appraisal. We have listed a few of the reasons below:
Location of the Property
If the property is located in a noisy neighborhood or too close to the supermarket, then the buyers may find the property undesirable. This may cause the appraiser to give the house lower points for location.
Poor Curb Appeal
If the interiors of the house are well-maintained, but the exterior lacks curb appeal, then it may affect the appraisal score.
Overly Customized Homes
A home that is overly customized as per the current home owner’s tastes will make it difficult for the appraiser to valuate the property accurately. Additionally, home buyers may not be interested in a property that that is extremely tailor-made as per someone else’s preferences.
If the house has installations that are from another era, then the home appraisal report will mention the absence of contemporary fixtures.
Outdated Floor Plan
The floor plans of houses built in the early 30’s or 40’s don’t offer a lot of privacy. This may be a considered a negative point as such properties wouldn’t interest modern home buyers.
Age of the House
Houses that are old may not fetch a competitive price, especially if they are not well-maintained. This may hurt the house’s valuation report.
Structural Damage or Foundation Issues
If the appraiser finds the house to be structurally unsound, it could drop the valuation of the house. It may even be cause enough to cancel the transaction altogether. Foundation issues will also have a similar impact on the appraisal.
How Does a Low Appraisal Affect the Home Seller?
A home seller may be affected by a low appraisal as they may not get the asking price of their house. Additionally, they may have to incur various expenses to carry out the repairs and renovations recommended by the appraiser.
Related: home appraisal, home appraisal near me, home appraisals near me, appraisal home, home appraisal cost, home appraisals, appraisal of home, home appraisal calculator, home appraises, how much does a home appraisal cost, what hurts a home appraisal, free home appraisal calculator, home appraisal checklist, how long does a home appraisal take, how much is a home appraisal, cost of home appraisal, home value appraisal, what is a home appraisal, appraisal value of home, home appraisal cost near me,
Related: how do home appraisals work, online home appraisal, appraisal home value, appraise homes, cost home appraisal, free home appraisal, zillow home appraisal, appraised value of home, home appraisal estimate, appraisal estimate home, average cost of home appraisal, cost of a home appraisal, home appraisal for refinance, home appraisal process, home appraisal values, how long does home appraisal take, how much does home appraisal cost, how to get a home appraisal, how to get a home appraisal for free, how to prepare for a home appraisal, mobile home appraisal, flat fee real estate brokers.