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James Dougherty Appraisers
James Dougherty Appraisers
12 Penns Trail
Newtown, PA 18940

MLM & Associates Appraisal Services
MLM & Associates Appraisal Services
Bucks County, PA

Maureen Fox Company
Maureen Fox Company
P.O. Box 243
Holicong, PA 18928


Bucks County Home Appraisal:

Everything that you need to know:

Bucks County Home Appraisal

A home appraisal is a crucial component of several transactions that may include buying a new home using a mortgage, refinancing an existing mortgage, or selling the house to anyone who doesn’t pay in cash. As a buyer, seller, or owner, you have to understand the intricacies associated with the home appraisal process and how an appraiser determines a home’s value.

About home appraisals
As already mentioned earlier, an appraisal is an unprejudiced professional opinion of a property’s genuine value. Appraisals are quite a common phenomenon in purchase-and-sale transactions. They are particularly popular with refinancing deals. In purchase-and-sale transactions, an appraisal helps to determine whether a property’s contract price appropriate or not based on its condition, location, and aspects. Conversely, in refinance transactions, an appraisal is an assurance to the lender that it’s going to provide the borrower with more money than the home’s genuine price.

Lenders have to make sure that the homeowners aren’t over-borrowing for a house. After all, the property serves as collateral for the mortgage. If the borrower defaults on the mortgage and goes into foreclosure, the lender will have to sell the house to recover the money it lent. In short, an appraisal helps the bank to prevent itself from lending more than it would be able to recover if things go south.

The value determination
  1. As the appraisal mainly protects the interests of the lender, the lender is the one who orders the appraisal. The process can cost several hundred dollars. In most cases, the borrower has to pay this fee.
  1. There is an Appraisal Institute. It’s an association of professional real estate appraisers. The experts of this organization say that a qualified appraiser should possess a license to operate and should have specific certifications. It’s a rule followed in all fifty states. Also, the appraiser should have a thorough knowledge of the locality. Based on federal regulations, the appraiser should behave impartially and show no direct or indirect interest in the transaction.
  1. The current market trends or recent sales of similar properties tend to influence a house’s appraisal value. Other key factors that help an appraiser assess the property’s value include amenities, the number of bathrooms and bedrooms, square footage of the house, and floor plan functionality. An appraiser has to conduct an all-encompassing visual inspection of the interior and exterior and note any conditions that adversely affect the value of the property. For instance, if it needs repairs urgently, then the overall value of the house will decline.
  1. Generally, appraisers use Fannie Mae’s Uniform Residential Appraisal Report for one-family homes. This report demands the appraiser to describe the interior, exterior, the neighborhood, and nearby comparable sales of the property. Then, the appraiser will come up with an analysis and conclusion concerning the property’s value based on his/her observations.
  1. The report must include the following:
Things that homebuyers should know
  1. As a homebuyer, you should know that an appraisal is one of the first steps in the closing process if you are under contract. If the appraisal tells you that the property is at or above the contract price, then you can proceed as planned. However, if the appraisal comes in below the contract price, then you should wait or derail the transaction.
  1. Neither you nor the seller would want to discontinue the transaction even with a low appraisal. In reality, you will be in an advantageous position with such a report. After all, you can use it as a negotiation tool to convince the seller to ask for a lower price. Besides, the bank won’t give you or any other prospective buyer more than the actual price of the house.
  1. While appraisals can prove beneficial to buyers, sellers may feel that a low appraisal isn’t accurate. As a result, they may not want to drop the price. That’s why both parties should contract another appraisal specialist. Appraisers are human beings, and they can make mistakes too. Or, you may consider presenting a factual case for a higher value to the original appraiser. They may see the reason in your claim and agree to revise the evaluation.
Things that sellers should know
  1. As a seller, an accurate appraisal that declares specific faults in a property may force you to reduce the price. You may think about waiting for an all-cash buyer who won’t require an appraisal. However, it isn’t going to be of use to you because there aren’t any guarantees that you’ll get the price that you desire. Very few people out there would overpay for a new home.
  1. If there have been any distressed sales in your location, then it can negatively affect the appraisal value. You may try to convince the appraiser that your property is at a significantly better condition than all the other houses in the region if you feel that the low appraisal value is the result of nearby foreclosures and short sales.

Things that refinancing homeowners should know
If you’re going to refinance a traditional mortgage, then you should be wary of low appraisals. They can prevent you from doing what you want to. The home requires an appraisal at or above the amount that you wish to refinance. Only then you’ll receive the loan approval. Then again, if your existing mortgage is an FHA mortgage, you mat refinance without an appraisal via the FHA Streamline program. It’s the best option for underwater homeowners.

Final words
If everything goes smoothly, then the home appraisal process is nothing more than just another checkbox for you tick. When appraisal values drop lower than expected, you can delay or cancel the transaction. Regardless of the situation encountered by you during buying, selling, or refinancing a home, the fundamental pieces of information concerning home appraisals would be useful to you, especially if you’re going to purchase your first home.

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