Not all real estate appraisers are created the same. Time and again, you will hear horror stories about real estate sales people—often inexperienced ones—who play the game of over-appraising properties. To the uninitiated home owner, this may initially come as a pleasant surprise—hearing that their property has more value than they had first thought. However, frustration and disappointment soon follow as the property remains in the market far longer than they have bargained for mainly because of its inflated price. This is long after wasting hundreds of marketing dollars trying to make a sale. As a result, property owners are forced to beat down price expectations, but by the time they do, a substantial amount of time will have already passed. The property will simply never be able to get the price it should have gotten had an accurate appraisal been performed the first time. It is for this reason that you should find trusted and reputable residential real estate appraisers like RD Clifford Associates who will make sure that your property is reviewed and valued accurately.
From the surface, a property appraisal may appear like just another additional expense lenders require, but it is, in fact, a crucial step that helps protect the interest of all that is and will be involved in the sale or acquisition of the property. Real estate appraisers play an important role in putting the correct value and price tag on properties for sale. They are trained professionals whose job it is to walk through the home and place a value on it, based on various methods and models as well as its comparative value against similar properties that are currently in the market.
Lenders typically require appraisals because the property in question will also likely serve as collateral for the loan or mortgage you are taking out. Banks and lending companies are only ever willing to lend money on a property when it is worth more than or equal to the agreed upon price. A property that is worth less than your loan amount offers no protection to the lender should you default or decide and attempt to sell. Lenders need to know that they can recover losses, if necessary, by re-selling the property on the open market. Should real estate appraisers find that the property has serious defects or isn’t worth its asking price, buyers have the opportunity to renegotiate a more appropriate selling point or completely back out from the deal.