{"id":7458,"date":"2023-04-13T14:37:54","date_gmt":"2023-04-13T14:37:54","guid":{"rendered":"https:\/\/www.ideeimmobili.com\/blog\/appraisal-real-estate\/"},"modified":"2023-05-26T10:48:49","modified_gmt":"2023-05-26T10:48:49","slug":"appraisal-real-estate","status":"publish","type":"post","link":"https:\/\/ideeimmobili.com\/en\/blog\/appraisal-real-estate\/","title":{"rendered":"Real estate appraisal for sale: what it is and how it works"},"content":{"rendered":"\n
If you are thinking of selling or buying a property, it is important that you know what a property appraisal<\/strong> is, especially if there is a mortgage application involved to finalize the purchase and sale. As we mentioned, the real estate appraisal is a detailed analysis of a property, which aims to determine the property’s commercial value<\/strong>. The real estate appraisal represents one of the fundamental steps to be taken during a purchase or sale, when deciding to buy or sell a home. In fact, establishing the market value of the property is essential in finalizing the disbursement of a possible mortgage. Typically, the request to send an appraiser for the property appraisal is made directly by the bank<\/strong> to which the potential new owner is applying for a mortgage, as it has every interest in knowing the value of the property in order to grant a proportionate and guaranteed amount. During the real estate appraisal, the professional hired by the bank performs a series of checks on the property<\/strong> in question in order to assess its state of maintenance<\/strong>, quality of<\/strong> facilities,location<\/strong>, and other features that may influence its actual market value. In any case, the appraiser may request additional specific documents based on the characteristics of the property and the purpose of the appraisal.<\/p>\n\n Generally, the real estate appraisal is paid for by the developer<\/strong>, i.e., the one who requests the appraisal. However, depending on the circumstances, the cost of the appraisal may be borne by other parties involved in the process of buying and selling the property. Usually, the bank will grant a mortgage equal to 80% of the lower of the purchase price and the appraisal estimate. For example, if the property is purchased for \u20ac200,000 and the appraisal estimates its value at \u20ac220,000, the bank can disburse up to \u20ac160,000, or 80 percent of the purchase price. Trust the Ideas & Real Estate team to help you gather the documents to sell your home quickly and with complete peace of mind.<\/p>\n<\/div>\n\n\n\n
A real estate appraisal is adetailed analysis of the property<\/strong>, which is carried out by an experienced real estate professional and commissioned by a bank<\/strong> or financial institution<\/strong>. In this article, we will find out what a real estate appraisal is, when it is conducted, who requests it, what happens during the analysis, who pays for the appraisal, and what happens afterwards.<\/p>\n\n
What is real estate appraisal? <\/h3>\n\n
The appraisal is requested by the lending institution and will be carried out by a real estate professional, usually a surveyor<\/strong> or engineer<\/strong>, who assesses the property’s characteristics and state of maintenance. The appraisal also includes an assessment of the property’s market price. A real estate appraisal is usually done when you want to sell a property, but it can also be required for legal purposes, such as in cases of separation or inheritance.<\/p>\n\nWhen is the real estate appraisal done?<\/h3>\n\n
The bank must understand what the value of the property is in order to understand the maximum amount it can disburse to the customer. In this way, the financial institution provides financing proportional to the value of the house to be purchased.
Usually, the property appraisal is done subsequent to the \n proposal<\/strong>\n<\/a> or more frequently after the \n preliminary of purchase and sale<\/strong>\n<\/a> and takes place before the \n deed<\/strong>\n<\/a> final. This is because the bank, in order to proceed with the mortgage application and sending the appraiser, requires to see the preliminary, or at least a proposal accepted by both parties.<\/p>\n\nWho should apply for the property appraisal?<\/h3>\n\n
However, in some cases, the property owner may apply directly to the bank for a property appraisal in order to obtain financing. In each case, the appraiser is hired by the bank to conduct the valuation of the property and prepare the appraisal report, which is then used to grant the loan.<\/p>\n\nWhat happens during the real estate appraisal?<\/h3>\n\n
Specifically, the appraiser conducts a review of the structural characteristics of <\/strong>the property, its location<\/strong>, and whether there are any public<\/strong> and private<\/strong> services<\/strong> nearby. Also analyzed are the zoning aspects<\/strong>, intended use<\/strong>, overall floor area<\/strong>, finishes<\/strong>, and general condition<\/strong> of the house.
The appraiser also examines electrical<\/strong> and plumbing<\/strong> systems<\/strong>, interior and exterior finishes, and whether there are any structural issues<\/strong>. If necessary, the appraiser may request additional verifications, such as soil analysis, topographical surveys, energy consumption surveys, and more.<\/p>\n\n
What documents are needed for the real estate appraisal?<\/h4>\n\n
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Who pays for the real estate appraisal?<\/h3>\n\n
For example, if the appraisal is required by the bank to provide a mortgage, the cost of the appraisal may be borne by the mortgage applicant or the bank itself, depending on the contractual terms of the mortgage. In any case, it is important to make it clear from the outset who will bear the cost of the appraisal, to avoid any misunderstandings or disputes later on.<\/p>\n\nWhat happens if the value of the house determined by the appraisal is less than the proposal price? <\/h3>\n\n
However, if the appraised value from the appraisal is less than the purchase price, the borrower may have difficulty covering the shortfall.
To avoid this problem, it is possible to request a pre-appraisal<\/strong>, which is an early valuation of the property. This allows you to have an estimate of the value of the property in advance, so you can avoid any surprises during the bank’s appraisal. In addition, it is possible to conduct the pre-appraisal with the same appraiser that the bank will use for the appraisal, so as to avoid any differences in valuation.
In addition, it is advisable to protect yourself by including a clause<\/strong> on the purchase proposal that makes the agreement conditional on obtaining a mortgage with the sufficient amount. In this way, the borrower avoids having to pay the difference between the purchase price and the appraised value if the bank decides to grant a mortgage that is less than the amount requested.
The situation becomes more complex if you have not made the proposed purchase conditional on the mortgage. In this case, your options are limited to paying off the missing amount in order to finalize the purchase, or blowing up the deal, losing your deposit and potentially exposing yourself to damages from the seller.<\/p>\n\nDo you wish to sell your home in Florence, Prato or Sesto Fiorentino?<\/h4>\n\n\n\n