The Role of Appraisals in Buying or Selling a Home in Chicago

A home appraisal is a crucial part of any real estate transaction. It helps all the parties involved in the transaction, from buyers to sellers to lenders. Many people, especially first-time home buyers, often do not know what home appraisals are and what their role is.

It takes an experienced Chicago home appraiser to answer these questions properly, especially the ones specific to Chicago’s market. At AnDel Appraisals, we have answered several questions for our clients about appraisals, their process, and their importance.

To share our knowledge with our readers, we have put together this blog to help them understand the role home appraisals play in a common real estate transaction, like buying or selling a home.

What is a Home Appraisal

A home appraisal is a professional assessment of your house’s market value. It is done by a licensed appraiser. 

The appraiser will visit your home, assess its condition, location, and other factors to come up with a value for your home. Other things that play a major role in the valuation of your home are the sale price of similar homes in your area and the market trends.

Moreover, houses close to schools and shopping places will be valued higher than the ones farther away.

How Do You Get an Appraisal?

How you get an appraisal sometimes depends on what you are getting it for. If the appraisal is required by the bank, most of the time, they order it for you. In other cases, you will be responsible for finding an appraisal company and booking an appointment with them. Usually, home appraisals are pretty straightforward, so you won’t have many problems.

Home Appraisal While Buying or Selling a Home

When selling a home, homeowners usually get an appraisal for their home to set a realistic listing price. 

For the buyer, when they select a property they want to buy and apply for the mortgage, the lender will require an appraisal to issue a loan. Lenders do this to make sure they are not issuing a loan for an amount higher than the home’s value. The cost of this appraisal is usually the buyer’s responsibility. 

We see that in the seller’s case, the appraisal is optional but highly useful. In the case of the buyer, it becomes required. Since every seller will have a buyer, even if the seller didn’t get a home appraisal before listing, they will come across one before closing the deal.

Sometimes, buyers also get an appraisal for the home to see if they are not overpaying for the property.

How Home Appraisals Affect The Buyer and The Seller

An appraisal affects the buyer and the seller in different ways. We cover both of them below:

Buyers

For buyers, their mortgage approval depends on the appraisal value matching the offer price. If the appraisal value comes in lower than the offer price, the buyer may need to cover the gap out of pocket or renegotiate with the seller. In some cases, the lender may deny the loan altogether.

Sellers

For sellers, if they end up overpricing the property, the appraisals may come in low and delay the sales. It is recommended that sellers make any minor repairs before the appraisal and highlight any recent home improvements to make sure they get the right value for their house.

If the appraisal comes in low, the seller has an option to challenge the appraisal. They will need to support their claim with proper data. Another option would be to negotiate with the buyer. In some cases, lower appraisals can lead to termination of the deal.

Final Remarks

We hope you found value in this blog and that we were able to add to your knowledge about home appraisals. If you are looking to get an appraisal, we will be happy to help you out with it. Simply reach out to us, and we will set you up with an appointment!