Does a House Have to Appraise for Selling Price or Mortgage Amount?
If you are considering selling your house, find out in this article if you need to appraise to get your asking (or mortgage) price. Read now for the answers to common questions about appraisals and house sales.
Does a House Have to Appraise for Selling Price or Mortgage Amount?
When it comes to selling a home or securing a mortgage, appraisals are an important part of the process. Many buyers and sellers want to know if the house must appraise for the selling price or mortgage amount. In this article, we'll look into the specific circumstance and what to expect.
What is an Appraisal?
An appraisal is an unbiased estimate of a property's value. A certified appraiser will consider a variety of factors such as the location of the property, the condition of the property, recent sale prices of comparables homes and more. The appraisal is an important step for buyers and sellers because it gives an idea of the home's fair market value.
Appraising for Selling Price
When it comes to selling a home, it is not necessary for the appraised value to match the asking price of the home. The appraisal estimate of the value of the home should be close to the asking price to attract buyers. However, buyers may be able to negotiate with the seller if the appraisal comes in lower than the selling price. Appraising for selling price is not a legal requirement, but it may be necessary to attract and reach an agreeable deal with potential buyers.
Appraising for Mortgage Amount
When buying a home, lenders typically require an appraisal to approve the mortgage. Appraising for mortgage amount is to ensure that the home is worth the amount that the buyer is financing. The appraised value needs to be equal to or greater than the mortgage amount for lenders to approve the loan. Lenders won't finance a loan for more than the appraised value, and if the appraisal comes in lower than the mortgage amount, the buyer must make up the difference with other forms of payment.
Conclusion
In conclusion, when it comes to appraisals, the expectations may be different for selling a home and securing a mortgage. Appraising for selling price is not a legal requirement, but it may be necessary to attract potential buyers. Appraising for mortgage amount is a necessity as lenders won't finance a mortgage amount that is higher than the appraised value.