Understanding the Home Appraisal Process for Homebuying in Indianapolis Part 1
Whether buying or selling a home in Indianapolis, the home appraisal process is a crucial step that can greatly impact the transaction.
An appraisal determines the fair market value of the property to ensure that buyers, sellers and lenders have an accurate understanding the home's worth. An appraisal is an unbiased professional assessment of a property's value, conducted by licensed appraiser. The appraiser evaluates various factors, including the property's condition, location and comparable sales in the area, to determine it's fair market value. Appraisals are typically required by lenders. Why? To ensure that the loan amount does not exceed the property value, to protect the lender and the buyer. If the appraisal is lower that the sales price, the lender may require the buyer to cover the difference, or the buyer may ask the seller for a price reduction.
The lender usually selects an appraiser from an independent third-party appraisal management company. Lenders used to be able to go straight to the appraiser, however legislation since the Mortgage Meltdown in 07/08 has changed that to protect parties from the risk of being frauded.
Understanding the appraisal process is essential for both buyers and sellers. By becoming more familiar with the appraisal process, you can better ensure the property got properly assessed.
Next week we will go into Part 2 of this.
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