In the world of real estate, understanding the role of appraisals is crucial. Knowing why and when an appraisal is needed can make all the difference in a successful transaction.
Why Are Home Appraisals Needed?
An appraisal serves as an unbiased assessment of a property's current market value. This valuation is essential for two main reasons:
- Pricing Accuracy: It confirms the purchase price aligns with the current fair market value for the property.
- Lender’s Requirements: Appraisals assess a property’s value and overall condition. This ensures a safe investment for the lender, since the property is collateral for the loan.
When Are Home Appraisals Needed?
Appraisals are typically needed in the following scenarios:
- Making a down payment of 20% or more
- Dealing with rural properties
- Purchase price or property value exceeds $1Million
- Private sales or non-arms length transactions, like selling to a family member
- Exclusive sales that don’t register on MLS
- Applying for B-type mortgage lending
Questions? Give me a call!
Danny Bell, AMP
Mortgage Broker | Lic.#M13001996
C. 289-200-9061
T. 905-426-4200
The Mortgage Centre
Durhammortgage.com Ltd. | Est. 1993
Reg. #10231