A home appraisal is a vital component of the home transaction. In fact, appraisal issues can account for 18% of homebuying closing delays and 9% of terminated contracts, according to NAR. As such, it’s crucial that you understand the home appraisal process before you start shopping for a home.
Having said that, here’s what you should know about appraisals when buying a home in San Antonio:
What is a Home Appraisal and What Does It Entail?
An appraisal is an independent, professional opinion of a home’s value. Typically, the appraiser will examine different aspects, such as home upgrades, maintenance, and lifespan of appliances, to determine the property’s overall value. The house’s amenities, floor plan’s functionality, number of bathrooms and bedrooms, and square footage are also crucial aspects in assessing the home’s value. Furthermore, the appraiser will look at comparable sales in San Antonio to ensure that the property is worth what it’s listed for.
Why are Appraisals Necessary?
Generally, your mortgage lender wants to ensure that you aren’t overborrowing for the property since the home serves as collateral for the loan. That’s because if you were to default on the mortgage, your home would go into foreclosure, and the lender would sell it to recoup the money they lent you. As such, the appraisal helps the lender protect themselves against lending more than they can recover in this worst-case scenario.
What Happens When the Appraisal Comes in Too Low?
If the appraised value is lower than the listing price and your sales contract has an appraisal contingency, you could back out of the deal and get your earnest money back. Alternatively, you could negotiate a price closer to the appraised one with the seller. If the seller is unwilling to negotiate and you still want the house, your lender might require you to put more money towards your down payment to make up the difference.
Know Everything About Appraisals in San Antonio!
When buying a home in San Antonio, appraisers will assess all aspects of the house you want to buy to determine its fair market price. Get in touch with our professional team today for more information about appraisals when purchasing a home in San Antonio!