home mortgageAs you might already know, summer is a very busy time for Island real estate agents. If you are a prospective buyer,  BlogHiltonHeadAgent.com will help you get to wherever you are going!

Today, we’re going to share four things every Hilton Head buyer should know about appraisals.

What Are Appraisals and Why Are They Important?

An appraisal is the valuation of a property by the estimate of an authorized person.  When you apply for a loan, banks reference your property’s appraisal as a way of deciding how much to loan. That’s why appraisals are so important.

Consider this example: Let’s say you place  a Hilton Head villa under contract for $400,000. You will need an appraisal for exactly that amount.  However, when the appraisal comes back, it says the property is worth only $390,000 – and the bank isn’t willing to give a penny more.  This would mean you and the seller are faced with a $10,000 budget gap.  This just might kill the deal, unless we can negotiate a solution.

Four Things to Know About Appraisals

The four points below can help you understand the appraisal process.  It is our hope that this information can help you in your purchase of the perfect Hilton Head Area property:

  1. Appraisers must meet certain criteria first. According to the Appraisal Institute, a qualified appraiser should be licensed or certified and also should be familiar with the local area. What’s more, federal regulations stipulate that the appraiser must be impartial and have no direct or indirect interest in the transaction. Fannie Mae even requires that appraisers certify that they have experience appraising similar properties in the same area.
  2. Appraisal values are influenced by a number of factors. For instance, appraisers will consider recent sales of similar properties as well as current market trends. They’ll also factor in such things as the home’s amenities, number of bedrooms, floor plan functionality and more.
  3. Appraisers are required to do a complete visual inspection of the interior and exterior of the home. During this time, appraisers are also required to note any conditions that may adversely impact the property’s value. This may include needed repairs.
  4. Generally speaking, appraisers use Fannie Mae’s Uniform Residential Appraisal Report for single-family homes. This report asks the appraiser a number of questions, including what the home’s interior and exterior look like, what neighborhood it’s located in and what nearby comparable sales there are. Other parts of the report include: a street map showing the appraised property, an exterior building sketch, an explanation of how the square footage was calculated, and photos of the home. After providing all of this information, the appraiser offers an analysis and conclusions about the property’s value based on this information.

We’ll Help You At Every Stage of the Hilton Head Buying Process

For EVERY stage of the home buying process, we want you to know that we’ll be there to assist you.  It is our agents goal to make your Hilton Head Home buying experience exceptional. Contact us by email today to learn more about the services we offer, the valuable information we have available and the insight we can offer.  Happy Hilton Head House Hunting!