When it comes to selling a home in Champaign County, an important part of the process is the appraisal. It doesn't matter how much you want to sell your home for or how much a buyer wants to pay. In the end, the appraisal determines the ultimate value of your home.
What is an Appraisal?
A real estate appraisal establishes the market value of a property. This is the amount of money a willing home buyer in Champaign will pay a willing seller. This value is also of interest to the lender, as they require an appraisal to provide assurance that the home can be sold for the amount being financed if the buyer defaults on the loan.
Once the home is under contract, the appraisal becomes what is known as a 'contingency item.' This means that the purchase of the home is contingent on the home appraising for the purchase price. If it doesn't, the buyer has the choice of walking out on the sale or renegotiating the price with the seller.
How Does the Process Work?
The home buyer is the one who pays for the appraisal, which is ordered by the buyer's lender and performed and compiled by a licensed appraiser who will, first of all, inspect the home. The appraiser will take into account comparable home sales in the area.
Ideally, the appraiser looks for houses within a mile of yours that are of a similar type, age and size, that have sold within the past six months. In some real estate environments, this isn't an easy task. In sluggish markets, appraisers sometimes have to expand their geographical area or look at older sales.
Then, using his or her training, experience and judgment, the appraiser will make adjustments to the sales prices of your home when comparing it to the others to arrive at a value for yours. This is the only value the bank will accept. The bank will not accept the CMA or what the seller wants to get for the house. The appraisal is the final arbiter of what the home is worth.
If your purchase agreement has a sales price over that of the appraised value, the contract will need to be renegotiated to make sure the sale will go through. This is where your real estate agent earns his or her keep. Rose Price has the experience you need to take care of these types of negotiations to make sure you get the best price when selling your home in Champaign County. Contact her today to see how she can help you sell your home.
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