Real estate appraisals can often be misunderstood. That is why it is a good idea to define what an appraisal is and learn more about the process involved. By definition, a real estate appraisal calculates a property’s value for the benefit of a lender. Therefore, an appraisal is not made for the purchaser’s benefit. It is requested for the sole benefit of the lender. The value of the building which the appraisal will ultimately determine, is based on numerous points ranging from square footage to its location.
Securing a Bank’s Investment
The purpose of a real estate appraisal in Vancouver is to safeguard the lending institution. By using this protocol, the bank is ensuring that it will not lend money on real estate that is worth less than its appraised value. The bank takes this measure so it can sell the property in case of default so by having an appraisal performed; a financial institution ensures that it can recover its money on a foreclosed property.
House appraisals in Vancouver are made so a lender can ensure that the loan he or she is granting is an effective investment – one where he or she can get their money back if necessary. If a property does not appraise at the value accepted by a buyer then, he or she cannot secure a mortgage.
Are Your Refinancing Your Home?
Now that you know why appraisals are performed, you have some insight as to when they are typically requested. Aside from the purchase of a home, a residential appraisal in Vancouver may also be performed to refinance a home. So, if you wish to tap into your home’s equity to consolidate debts or pay for your child’s tuition, you will also need to request an appraisal.
Other Reasons for Appraisals
Sometimes an appraisal is needed in the case of an estate liquidation. If you already have your own home but you inherit an estate, you may want to liquidate the inherited property. If so, you will need to request an appraisal. Therefore, an appraisal assists you in determining the fair market value of a property you may want to liquidate. By contacting an appraiser, you can ensure that any liquidation goes smoothly and that the transaction leaves no room for dispute.
An appraisal may need to be performed, as well, if you plan to relocate. By obtaining a professional appraisal, you can find out how much you can receive for a quick sale of your property. Divorce settlements also lead to property appraisals so if the property is shared, it is important to know its value so that you can proceed more amicably with a divorce settlement.