You have found a buyer for your home and have agreed on a price. The buyer has been approved for the home financing. The only thing standing in the way is the home appraisal.

Sales Contract

There is an old adage in real estate; a home is only worth what someone else is willing to pay for it. As the home appraiser begins the process of determining the homes appraised value, the purchase agreement (also known as the sales contract) is used to establish the home’s worth. A home’s worth is established when someone (a buyer) agrees to pay you (the seller) a set dollar amount to purchase your home.

Market Value

When a home is sold, the bank requires an appraisal to verify the value of the property. A record of these sales are held at the county courthouse. In general an acceptable comparable home must be within 15 miles of the home, in a similar community, and occurred within the past 6 months. The closer the homes are together and the more recent the comparable sale the better the comparable is for the establishing value.

Other factors appraisers use are the comparable features of the home. For instance, the size of the home in square footage, the condition and age of the home, the quality of materials used in construction, and any renovations that have been made. Normally, an appraiser needs three comparables to establish value.

Closing Remarks

When preparing for your appraisal, there are a few things that you can do to help establish value. Show that the home has been well cared for by having the interior and exterior of home clean and free of clutter, have the grass mowed and shrubbery trimmed, and be available to answer questions and to discuss any repairs and or renovations with the appraiser.

Hubert Miles is the founder of Waterfront Houses USA, an online advertising service that provides Coastal Properties and Coastal Property in the US and Canada.

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