A home appraisal is a key part in a real estate transaction when they buyer is getting a mortgage from a lender. Some people think that home appraisals are either arbitrary or overly complicated.
An appraisal is nothing more than an opinion about the value of a home based off of data from similar houses in the neighborhood. Here are 4 myths that you may have heard about the appraisal process in Ventura County.
1. The Appraiser is on the Side of the Buyer
Many people think that the appraiser works for the buyer and that this will cause appraisals to skew in favor of the buyer. Although the buyer does pay for the appraisal, the appraiser is actually hired by and works for the lender. The buyer’s lender is lending money on an asset, so they want to have a degree of certainty that their investment is safe. In most cases, it is against the law for the buyer (or seller) to pressure or coerce the appraiser into coming up with a certain price for the home. Appraisers are also held accountable to government regulatory agencies.
2. A Bigger, Nicer House Means Higher Valuation
Just because you have the biggest, nicest house on the black, it doesn’t necessarily mean that you are going to get a high appraisal. Unfortunately, the process is not that simple. As stated above, the value of your house will be based on similar homes that sold in your neighborhood. If your house is that much bigger and nicer than any of the other houses, the appraiser won’t have any data to work with. In these cases, the value could come in lower than both parties think it should be. The house should appraise for more than the other homes, but a lot of it will depend on the appraiser’s opinion at that point.
3. An Appraisal Equals a Home Inspection
Some people may tell you that a home appraisal is the same thing as a home inspection. This may be because both inspectors and appraisers help determine the condition of a home, but that’s where the similarities end. While the appraiser’s job is to determine the market value of the house, the inspector’s job is to detect any and all problems with the property.
4. There’s Nothing You Can Do About a Low Home Appraisal in Ventura County
If you are the seller and the initial home appraisal comes in a lot lower than you think it should, you do have a couple of options. You could always contact the buyer’s lender and request another appraisal. Be aware that you will most likely have to pay for the new appraisal in this event. Some real estate professionals might tell you that you should get your own appraisal done before putting your house on the market. We don’t necessarily agree with this approach, as you will be paying for this appraisal and the buyer will still have to get their own appraisal anyway.