Monday, November 20, 2017 / by Meagan Henry
Selling Real Estate: Potential Pitfalls of Appraisals
If you’re in the process of selling real estate, whether in Georgetown or elsewhere, odds are good you will need an appraisal. And, while it may seem like an innocuous step in the selling process, that one little document can have a major impact on your home’s sale, for better or worse. More often than not, you won’t see much (if any) impact from an appraisal when selling real estate—it’s primarily for the buyer and their lending company. However, there are a few instances where an appraisal can hurt or even halt the sale of your home. In those instances, it’s important to be working with a realtor who is willing to put the legwork in to help you—like The Russ Phillips Team, here in Georgetown—because there are ways to take a poor appraisal and turn it around.
Appraisals from The Seller’s Perspective
By and large, the appraisal process is there for the buyer and the buyer’s lender. Since the home itself is used as collateral for a mortgage, the lender needs to know the home’s value before signing off on the loan. This way, if something happens, the bank knows they can recoup that loaned money by foreclosing and selling the home. It’s why banks are willing to offer a loan for such high amounts, and why an appraisal isn’t usually necessary until the house is under contract. The bank just needs to know that the home is as valuable as the amount of the loan requested. The caveat here, as you may imagine, is that an appraisal which comes back with a lower value than the sale price can have a negative impact on the sale. From the bank’s perspective, lending more money than the home is worth is not a financially solvent decision. When an appraisal comes back lower than expected, they may refuse to offer the loan, and the sale may stall or fall through completely. Thankfully, if this happens, there is hope!
Clearing Up Appraisal Issues
The reason for a lower than expected appraisal can be any number of different things. The appraisal is done by an unbiased individual who is trained and certified to look for a list of different qualities. Of these, the home itself isn’t the only thing in question; the yard, exterior upkeep, and even the neighborhood can affect the appraised value. For example, if several homes in the area aren’t kept up well and sell for a lower price, the appraiser will take this into account and this can cause them to give your home at a similarly lower value. However, if your home is in considerably better shape than the rest of the neighborhood, you can ask for a second evaluation to take that into account. This is where choosing the right realtor will make a difference.
Changing Appraisal Outcomes
If you have an appraisal that comes in with a lower value on your home than expected, you don’t have to take that at face value. At The Russ Phillips Team, we pride ourselves on being knowledgeable about not only Georgetown but the Greater Austin Area, and that includes everything from market trends to property values. Our realtors can help you go over an appraisal to see where that low value may have come from, and we’ll take the steps to help you change that appraisal as much as possible. Do we need to track down public records on past sale information or other documents that may help improve your appraisal? Our team is willing to put in that legwork to help you get the best price when selling real estate.
If you’re ready to start the selling process with the best realtors in the area, contact The Russ Phillips Team today!