Appraisals and How They Work in California
Appraisals and How They Work in California
When you sell or buy a home, the estimated worth is a major consideration for the process. All of the aspects of a successful transaction rest on the property’s value. If you’re unfamiliar with the appraisal process, what do you need to know to ensure you understand what’s happening? How does this change if you’re a buyer or seller in California? Let’s take a closer look at estimates, their accuracy, and all of the processes involved for appraisals.
How Do Appraisals Work?
In real estate, both the land and the home on it are valued based on a number of different criteria. Since individual homes are not bought and sold with any regularity, they need to be reevaluated whenever they’re put on the market. Each property is unique so that is taken into consideration when determining the value.
An appraisal will look at everything from the location to upgrades and home improvements made under the current owners. The appraiser will also note any deficiencies and required repairs or updates to occur if a report is made ‘subject-to.’ Ideally all parities strive for the final report to be ‘as-is.’
The final report could also affect the loan amounts for the mortgage and can affect other financial matters like settling estates, big life changes, and taxes.
For the California Home Buyer
Home appraisals are meant to be unbiased. For instance, the seller may believe the value of their home is worth their own purchase price and the money they’ve invested in home improvements since they’ve owned it. If that were the only criteria, the market would always favor the seller.
Appraisals are conducted by a neutral third party. This gives the buyer a better understanding of the value of the home based on established criteria used to value all homes in the area.
Very often, the appraisal will come in at or above the negotiated price. When this happens, the transaction will proceed as planned. If home is valued below the purchase price, renegotiation can help the buyer pay a fair price.
For the California Home Seller
For sellers, there are other concerns. The biggest is when the appraisal is lower than the asking price. This means that, if the appraisal is correct, the price will need to be renegotiated. Lenders will use whichever of the two values is less to approve financing.
A seller could potentially hold out for a cash buyer, but that isn’t going always going to work out. It will also take some time, meaningyour home will be left on the market much longer, which is never good for a listing.
What’s the Deal with Zestimates?
Now, with a lot of online resources for searching homes, people feel like they have more information than they really do. Many will rely on Zillow and their published Zestimates for the value of the house. But this information is imprecise at best.
Using an online tool can be helpful to kickstart your home search, but it shouldn’t be your only avenue. It’s far more important that you’re informed fully as either the home buyer or seller.
The first step is always to talk with a lender so you can get a better understanding of your current financial picture. For California homebuyers, call Zachery Adam. His roots are in the Bay Area and, even though he lives across the country, he understands how to work with people in the Golden state to get golden rates. We encourage you to talk with the team at GoPrime in California to learn your options and determine the best way to get you in your new home. Contact Zachery Adam and the team at GoPrime.
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