An appraisal is a way to find the value of a property. Appraisals are required by lenders to ensure that the purchase price of a property is correct. As an example, a lender does not want to lend $215,000 on a property that is actually valued at $200,000. As a side note, a cash transaction allows the waiver of an appraisal.
The typical time-frame for when an appraisal is ordered is after the inspection period. There are various reasons for this, but one of the reasons is so that money is not spend on an appraisal by the buyer before knowing if there are issues with the property.
Someone may wonder why a computer cannot figure out the value through an algorithm. While there has been much discussion around this possibility, it comes up empty. The reason for this is that there are too many factors to consider. Each property is unique. Even if we had two houses of the same square footage and features, the lot is not going to be identical. Square footage of a property, listed features, lot size, and even pictures are not enough to determine the value. In addition, the market is constantly changing. Human intervention and investigation are required to decide the current worth of the property.
If you have any real estate questions or needs, please give me a call.
Matt Gatewood
Realtor®
Keller Williams Louisville East
502-594-6582
