These two incidents demonstrated to us clearly that an appraisal is definitely not an exact science, and that the valuation really is little more than an educated guess. We appealed, and this time the same appraiser raised the valuation of our house by over $75,000 after I suggested some different comparable properties that he could use as part of the appeal process. Our initial appraisal came in lower than we had hoped again, and we wouldn't have been able to refinance for enough to pay off the home and also take cash out that we wanted to use to consolidate other debt. We also had a second experience with how inexact appraisals can be when we tried to refinance years later. Although there was less than three weeks between the different appraisals, the value placed on the home by the second appraiser was over $100,000 more than the initial valuation. Our builder advised us to switch to a different mortgage company, and that mortgage company ordered an appraisal of its own with a different appraiser. Based on that appraisal, we would not have been able to borrow as much as we needed. We worked with a lender who ordered an appraisal that came in much lower than we had anticipated. My husband and I experienced this firsthand when we built a home and had to get it appraised in order to close on a permanent mortgage in order to repay our construction loan. An appraiser can choose which properties to consider comparable to yours, and there may be many within a geographic area that range widely in price. One big reason why you shouldn't necessarily count on home appraisals to provide an accurate valuation of a home is because they are very subjective. Why you may not want to trust an appraisal's estimate of value But, the reality is, this may not be the case. Since lenders require appraisals, you may assume they are very accurate. Lenders want to see this analysis because they want to confirm the home is worth enough to serve as collateral that guarantees the mortgage loan so they don't lose money if you fail to pay off your mortgage. An appraisal is an analysis of the valuation of the home performed by a professional.Īppraisers will evaluate how much your home is worth based on a comparison of your property to others in the area that sold recently. When you apply for a mortgage, chances are good that your lender is going to require a home appraisal.
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