You’ve found your dream Lake Havasu home. Now it’s time to cross all your “T”‘s and dot all your “I”‘s before it’s all your own. One of the first items on your closing checklist is the home appraisal. So, what exactly is that?
Your Guide to a Lake Havasu Home Appraisal
The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party. It is used to determine whether the home is priced appropriately. If you must borrow money to pay for your home purchase, your lender requires that an appraisal be performed.
How Does an Appraisal Work?
During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the property includes a deck, a view, or a large yard. The appraiser will also compare the home to several similar properties that were sold recently in the area (typically within the last 30 to 60 days).
The final report must include a street map showing the property and the ones they compared it to. This also incorporates photographs of the interior and exterior, an explanation of how the square footage was calculated, market sales data, public land records, and more.
What Happens With the Report?
After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safeguard for the lender, as the Havasu home in question acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
What if My Appraisal Falls Short?
Sometimes, an appraisal falls a little shy of the agreed upon sale price. When that happens, you have four options: try to negotiate a reduction in price, pay the difference in cash, dispute the appraisal, or walk away. In a highly competitive seller’s market, sellers rarely reduce their price. If you really love the house and/or you cannot come up with more money, you might want to consider disputing the appraised value. Talk to your real estate agent to see if this is a viable option for you.