Home values continue to rise. In September, the local MLS reported that the median sale price for a Lake Havasu home came in at $275,000. That makes now a great time for you to sell your home. A new home appraisal rule recently went into effect that affects which homes require appraisals as part of the home buying process. Will this affect you? If so, how?
New Home Appraisal Rule
Since 1994, the FDIC required an appraisal for any home sold for $250,000 or more. However, as you know, home prices have gone up considerably. Therefore, federal regulators decided it was time to revise this rule. Last year, they suggested raising that to $400,000. As of about a month ago, it became official under FIL-53-2019. However, that does not apply to any government-back loan (such as FHA, VA, HUD, Freddie Mac or Fannie Mae). Appraisals must follow each agency’s guidelines as part of the sale transaction process. Even so, approximately 40% of buyers using conventional loans should see a difference.
Instead of an appraisal, Lake Havasu homes that fall under these guidelines must obtain a home evaluation. An evaluation provides the bank with an estimated market value. Still, the evaluation process tends to take much less time than a full appraisal.
Should I Still Obtain an Appraisal Before I List?
While not required, it certainly doesn’t hurt to pay for an appraisal before you list your Lake Havasu home. Why? It helps to find out what your property is worth so you can price it appropriately. Any buyer utilizing a government-backed loan to fund their property must pay for one. The bank won’t approve a home loan without it. If you try to sell your home for more than its appraised value, it could delay the process. Contact your Lake Havasu REALTOR® to find out what they think before you go through the expense of an appraisal.