What is the appraised value?
The appraised value, or mortgage valuation, refers to the estimated value of the property by a qualified appraiser.
Factors taken into consideration in an appraisal include census data of the neighbourhood the property is located, sale prices of other homes in the area, the current market value for a similar home in the area, the demand of that type of property, and sale history of the property in question.
A property report can actually be purchased, and the last time I did it, I found it extremely helpful, even though it set me back a good $60 or so. It’s worthwhile if you are seriously considering a property. The cost is also a drop in the ocean compared to what you are potentially going to sink in should you secure the deal. It helped me to see the property I wanted in the context of the housing market. It also forced me to seriously think about how much higher I was willing to pay above the actual value of the property. When the market is really hot, you could be paying a whole lot more than it’s really worth.
The outcome of the appraisal will also have bearings on your ability to secure a home loan.
Before your mortgage is approved, the bank will assess the value of the property. If the appraised value is low, the bank may refuse a loan as it it too high in relation to the real value – unless the buyer comes up with the difference of course.
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