You’re pre-approved for a mortgage, you found your dream home and put in an offer. It’s been accepted! Before you can take possession, an appraisal is necessary.
Will you be able to move forward with the purchase? That depends on the loan-to-value of the home you’re pursuing.
Here’s what Eric Ridlington, owner of Prestige Appraisal Service, had to say about the process.
Michigan Mortgage: How is the value of a home appraised?
Eric Ridlington: Simply put, an appraisal consists of a comparison of your home to the most similar, recent and nearby sales in a given area. The appraiser will view your home inside and out, and use that for the basis of selecting comparables.
MM: What factors do you look at when appraising a home?
ER: The appraiser should consider all features including – but not limited to – the site, design, quality, condition, size, room count, added features and overall appeal to the market. An appraiser should consider all factors of a home and/or property as the typical buyer would, but also with a professional eye because of their experience in their given market and neighborhood.
MM: Why is the appraisal value so important in the lending process?
ER: The value of your home assists the lender in determining to approve your loan or not, or to what extent to agree to lend. Meaning, how much money to lend you. They’ll use the appraised value to calculate loan-to-value.
MM: Thanks for the great information! If a seller is interested in increasing the value of their home, what updates or upgrades should be made?
ER: The most common updates which impact value are the big items such as siding, kitchens, bathrooms, etc. However, to get a big bang for your buck, flooring, paint and light fixtures go a long way because those items cover such large areas and painting can be done without a professional in most instances, if you’re willing.
Not only is Eric Ridlington an appraisal expert, he’s also a professional member of our Service Rewards program that offers home discounts for honorable service. Why?
“The Service Rewards program appeals to me because it benefits many people who work in the community in careers which help so many people,” he said. “I see it as an opportunity to say thank you for their service.”
If you have questions related to the appraisal of your home, give us a call at 231-799-2606 or visit our website. As always, we’re here to help!