An appraisal is a written document that shows an opinion of how much a property is worth. The appraisal gives you useful information about the property. It describes what makes it valuable and may show how it compares to other properties in the neighborhood.
WHY DO LENDERS REQUIRE APPRAISALS?
When you borrow money to buy or refinance a home, your lender may need to get a new appraisal to verify the stated value of the property. An appraisal helps assure you and your lender that the value of the property is based on facts, not just the seller’s opinion.
HOW CAN I OBTAIN AN APPRAISAL?
If a lender requires an appraisal, we will order the appraisal on your behalf.
WHEN IS AN APPRAISAL REQUIRED?
In mortgage financing, appraisals are required to confirm the value as well as the condition of a property. Here are the most common scenarios where they could be required:
- Private sales
- Unique properties (log homes, mobile homes ext)
- Non-arms length transactions (ex between family members)
- Acreages and/or rural properties (or properties with large outbuildings or animals)
- Properties where there could be structural issues (ex MLS listings referring to "handyman special" ext")
- Refinances or renewals
- Conventional mortgages (or for those putting 20% or more down)
- Rental properties
- New construction
Some lenders will rebate the cost however you should budget to have the funds available. Most banks who "cover" the cost, simply charge it back to you at closing.
As the mortgage lending landscape tightens, we have been seeing more requirements for appraisals so it is best to be prepared in case one is required.
The information and services offered on this Site are provided with the understanding that neither Dominion Lending Centres Inc., nor its suppliers or users are engaged in rendering legal or other professional services or advice. Although we strive for accuracy, timeliness and completeness, information quoted is not guaranteed and may change at any time and the information you obtain at this site is not, nor is it intended to be, legal advice. If you require specific advice regarding your own situation please contact me for consultation.
