Can You Get a Free Home Appraisal? Value It Here!
Do you need an appraisal of your home? It is likely that you want to know first what it will cost you and, even, if it is possible to appraise a house for free. In fact, you may be asking yourself this last question after having seen, in the online search engines, offers and more offers to appraise a free house online in less than a minute. Before you entertain any of these offers, take a few seconds to think about it. Everything depends on what you specifically need and what these low-cost offers provide and whether it is what you are looking for.
When is it necessary to carry out an appraisal of my home? It is important to know the real value of a home, whether you want to put a house up for sale, or if you are going to apply for a mortgage. Since the real estate market is constantly changing, it is recommended that you update the valuation of your house one month in advance of the purchase/sale of the home.
What is an Appraisal?
An appraisal is the valuation of the "real" price of a home determined by a professional appraisal agency once a series of checks are performed. It is a totally essential operation if you want to secure a mortgage loan for the following reasons:
- The bank needs the appraisal to calculate any associated risks related to the loan process. The entities rely on the value of the appraisal to calculate if the property would be enough to recover the money loaned to the client in case of non-payment.
- The bank calculates how much money it can lend you. If the purchase price is higher than the appraisal, the mortgage will not cover the entire amount. On the other hand, if the appraisal is higher than the price of the property, it is possible that the entity can lend you something more than 80% of the sale. Of course, you must be aware that banks rarely grant 100% mortgages.
- It helps you to know if you are making a good purchase. The appraisal is also a good way to know if the home that you want to buy has a price that is close to its real value. It also gives you the ability to negotiate otherwise and allows you, therefore, to reach a better agreement for your interests.
The Parameters
When valuing a home, different variable parameters are taken into account to obtain the value of the property at a specific time:
The sum of all of these parameters is what will finally determine what the theoretical “real price” of the house is. All appraisal agencies tend to use similar methods, so the results should not vary much from one company to another.
The Bank Pays
So far we have seen what the appraisal process consists of and who can carry it out, but how much, if any, does it cost to the future homeowner? Each appraisal company charges a certain fee, although as a general rule, there is an average price, if you hire this service on our own. Of course, it can be lower or higher, depending on aspects such as the final value of the property or its size. Although they are not required to do so, some banks offer to pay the customer's appraisal in addition to other mortgage expenses. And so, in this case, you could conclude that the appraisal was free since, there were no out of pocket costs to you.
The Seller Pays
In some cases, you will find that sellers who are in a hurry to sell their home will offer to pay some of the fees to move the process along. This might include the appraisal fee and/or the closing costs. If the seller does not offer this upfront, the buyer can ask the seller to do just that. There is no harm in asking.
Online Appraisal Tool
It does not matter if you are thinking of buying or selling a house. The truth is that you may have asked yourself "How much is the house or apartment worth?" Correctly pricing the property is a key factor. For example, a home advertised with an above-market price can scare off potential buyers, making the sale difficult. Thanks to several free online appraisal tools, you can discover the real value of your home in just a few minutes. This does not mean that the tool is going to give you the exact appraised value, but it might give you something very close to it. You may still be asked by the mortgage lender to use one of the best professional appraisal services for accuracy.
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The Factors
On what factors is an online appraisal based? Let’s take a keen look at this.
Location of the Apartment
When evaluating the price of a property, it is necessary to take into account its location, since, depending on the city or town; the price per square meter varies. While prices are high in cities where demand is also high, the cost drops where there are fewer interested parties. Even within the same region, the contrasts can be significant. With online appraisals, the area is analyzed as it relates to location, obtaining relevant data about the neighborhood and its services (green areas, transport, accessibility, leisure, etc.). In addition, the house is compared with offers of similar homes that have been sold previously in the same area, so that the price is in line with the market.
Surface and Layout of the House
The value of a home will vary according to the characteristics of the home (size, number of rooms, etc.) and the state in which it is located. These factors influence when setting the price and establishing the comparison with other homes. The future buyer will always value the qualities and finishes such as the type of windows and the insulation in walls and ceilings, the energy installations, the state of the pipes or the taxes; among other things.
Steps to Perform a Free Online Appraisal
Appraising a house online through an appraisal tool is a very simple process. First, you have to enter the address where the house you want to value is located and the size of the house (including the number of rooms and surface area in square meters). Next, and to obtain a more accurate appraisal of your property, you will have to answer a series of simple questions about your house (type of home, condition of the property, if it has a pool, garage, terrace, etc.).
Is Doing a Free Home Appraisal Any Use?
In recent years, companies have emerged that offer to value property for free online through a bank, real estate agency, or appraisal company. There are some companies that have their own mobile appraisal applications, but bear in mind that this could be an unofficial appraisal, in some cases. It is important to remember that these valuations may not be official mortgage appraisals, as they are not carried out by companies approved by a mortgage lender.
Consequently, these appraisals may not be presented to a mortgage lender to be used as a reference to determine the true value. However, as indicated before, they can be useful to get an idea of how much the home you are interested in would cost you. In this way, you can have the estimated numbers to assess whether you could buy the home, you can also compare the figure that you got with what is required by the seller to see if the purchase price is above the real value or not.
Reliable Valuation
An online valuation is carried out with the data you provide and those that can be added to know the value of the home, but it is not entirely a free online appraisal and it does not replace a mortgage appraisal. A home appraisal must always be carried out by an approved appraiser and supervised by the mortgage lender, its administrative regime, whose objective is to enhance the quality and transparency of appraisals. For this reason, a free online valuation is not always a reliable valuation.
Most appraisal companies apply the comparison method recognized by property valuation regulations. For each valuation, from among the properties on offer, those that can be comparable, due to their proximity and characteristics, to the property to be valued are selected. The comparables are duly homogenized according to their characteristics for calculating the property valuation.
The Steps to Follow
There are some companies that use special algorithms to dig deep into their database of properties being sold and have sold to find an estimated value for your online home appraisal. In this case, artificial intelligence is used to extricate the data using the best comparables to determine accuracy in value. Once you are on such websites, you must:
Input the address
Input the square footage, number of bedrooms and bathrooms
Once this is done, the tool will present you with a detailed report, which includes the rental price, sale price, and market evaluation. You will also be given properties in the area that are comparable.
A Mere Assessment
If what you need is a merely indicative assessment of your home, you can go use a free online appraisal service. However, these calculations can help you guide the price at which you can sell your home, but not much more than that. In addition, the zero-cost appraisal services offered provide an estimate without a professional appraiser visiting your home. This is an essential step when you want to obtain an adjusted appraisal that reports the real value of an asset and that does so taking into account determining aspects, such as whether renovations have been carried out in the house. Therefore, these free paid services can serve as a clue, but they will not go much further. Also, what if what you need is a legally valid appraisal?
Conclusion
Appraising an apartment to sell will hardly be free if what you need is a valid document that also has an expiration date since the value of the real estate market constantly fluctuates. The truth is that there is no single price for an appraisal because not all appraisers charge the same, nor are all appraisals the same. Therefore, the price will vary depending on aspects such as the size of the property or the use that will be given to it.
So, forget about the free service, because for this type of report it is necessary that you go to professional appraisers who will provide you with a valid appraisal and will perform it following the procedures established by law. If you need to have an appraisal done because you are pursuing a loan application, then you might be interested in Loanry, which is a financial store on the Goalry platform with access to more information that could help you.