When it’s time to list your home for sale, an appraisal just makes sense. It doesn’t matter if your home is located in Toronto or Brampton, getting it appraised before listing it provides many benefits. Not only will an appraisal give you a floor price for your home, but it will also help to back up your asking price. Since pricing your home correctly is one of the most important steps when listing your home for sale, an appraisal is worth the cost.
What is an Appraisal?
An unbiased estimate of the value of your home is known as an appraisal. You’ll hire a professional third-party appraiser to create a report based on your home and recently sold homes similar to yours.
Lenders will use an appraisal to determine the amount of money they are willing to provide buyers. If the appraised value is lower than the amount offered, the buyer may need to provide a larger down payment as the lender might not provide enough money.
Appraisals are used to help protect lenders, but they can also be used by home sellers. With an appraisal, you can avoid surprised and you’ll have a tool to help you list your home for sale at the right price.
Top 6 Benefits of a Home Appraisal
1. Provides the Current Market Value
A professional appraiser will be able to determine the current market value of your home. With the help of comparable sales in the area, your appraiser will give you a good idea of what your home is currently worth.
2. Make Pricing Your Home Easier
Real estate agents will likely do a comparative analysis when choosing a listing price for your home. While this is certainly helpful, an appraisal will provide an even better tool when listing your home for sale.
3. Provides Accurate Data
When you list your home for sale, you’ll want to include information about the property, such as square footage, number of bedrooms, number of bathrooms, etc. An appraisal will give you accurate information for your listing.
4. Provide Home Improvement Ideas
An appraisal can help to pinpoint any home renovations you can tackle to add value to your home before selling it. You’ll know how old the roof is and what might be hurting the value of your home.
5. Help Keep the Deal From Falling Apart
As you begin to accept offers on your home, you’ll know what the home is appraised for. This can help to ensure you don’t accept an offer the lender won’t approve of once the buyer orders an appraisal.
6. Provide Credibility
Setting the list price for your home is vital to getting it sold fast and for the right price. Without an appraisal, you’ll be counting on the opinion of your real estate agent only. When you order a third-party appraisal report, you’ll gain credibility to back up the listing price.
Appraised Value vs. Current Market Value
An appraisal is a great tool to help with listing your home for the right price. However, it shouldn’t be looked at as the most you can accept for your home. Instead, the appraised value should set the bottom price for negotiations.
The market will determine the value of your home. If you get multiple offers on your home, the market value could end up higher than the appraised value. It’s not uncommon for buyers to disagree with the appraised value.
You might also find yourself in a situation where an appraisal was done before you listed the property, but it doesn’t sell for a few months. During that time, the value of your home can be impacted by other similar homes selling.
Are You Required to Get an Appraisal?
No, getting an appraisal is not required to list your home for sale, in most situations. However, in some situations, such as a divorce, or if you have plans to refinance your mortgage to renovate the home, you might be required to get an appraisal before listing your home for sale.
While you might not be required to get an appraisal before listing your home for sale, it’s still a good idea. According to TheStar.com, a formal appraisal is the best way to find out the value of your home.
Ordering an appraisal, as the seller, also helps to take some of the emotion out of selling your home. Maybe you know the price your neighbor’s home sold for and you think your home should sell for at least that price. With an appraisal, you’ll get a better idea of how much your home is actually worth compared to your neighbor’s home.
Use the Appraisal to Your Advantage
After having your home appraised, you can use the report to your advantage before listing your home for sale. Sit down with your real estate agent and go over the appraisal report.
While it’s not a home inspection, the appraiser will likely note the age of some of the systems of your home. They will also point out things that could be hurting or helping the value of your home.
Your real estate agent will understand the language within the report. It can be rather dry to read on your own, but a good agent will be able to point out important information.
Since you haven’t listed your home for sale yet, you can use the appraisal report, and the advice of your real estate agent, to make home improvements. Maybe the roof is old and really needs to be replaced. Getting it replaced before listing the home for sale can take what would be a huge obstacle and turn it into a highlight.
Not only will getting your home appraised before listing it for sale help you with pricing, but it can also pinpoint the things you can do to improve the value. It’s a tool sellers can use to ensure the home sells fast and for the right price. While it’s not required, getting an appraisal before selling provides plenty of benefits.