Appraisal is simply an expert opinion from a state-licensed professional on how much the value of the property really is. An appraiser uses many factors when determining the property value. They do a full detailed report and explain on how they came up with the property value. The first step is to physically examine the property inside and out to see which features bring up the value. They also look at location and recent sales around the property at question and provide anywhere from 3-4 comparables in order to better determine the value. These properties have to be very similar to the property being appraised; to specific components such as: lot size, square footage, garage type, finished or unfinished space, etc.
An appraisal is an important part of the process when you are applying for financing on your home. The lender doesn’t always ask for an appraisal but 9/10 times you need to get this done in order to get your mortgage approved. This step insures the lender that the value of property matches the asking price and that the property is not overpriced. An appraisal will determine how much the lender will give you to buy that particular property. This also protects the bank from getting stuck with a property that is worth less than they have invested and protects you from over paying for your residential or commercial property.
Once you apply for a mortgage the lender will provide an approved appraisals list with the company’s they work with in order to keep consistency and ensure the appraisers are fully licensed and certified. The client takes care of the cost and is usually reimbursed once the mortgage has closed. The cost of the appraisal is typically around $300, it can be more depending on the property type and size.
Contact me today for any referrals on appraisers and your mortgage needs all in one.
Robert Clancy, AMP,
SAFEBRIDGE Financial Group
Tel: 416 899-1467