Weinberger Law

Why is a real estate appraisal important in a home purchase?

As a Scottsdale resident searches for a home in the area, one of the primary considerations is probably the price. Once a home is chosen, the purchase price drives a large part of the remainder of the transaction. A monetary offer is made and accepted. Then the mortgage loan process picks up speed if it has not already begun, and a real estate appraisal is a required part of that transaction.

The appraisal is done not only to verify the fair market value of the home, but also to provide a certain analysis regarding certain aspects of the home such as its neighborhood, access to it and characteristics of the home that could adversely affect its value. In addition, it will tell the buyer, and his or her lender, something about the neighborhood and other issues that could affect the current and future value of the home. Lenders must be satisfied with the appraisal before giving final approval for a mortgage loan.

This may be a Scottsdale resident's home, but it is an investment to the lender. For this reason, it must have good potential for resale should the owner default on the loan, and the lender forecloses and end up needing to sell the property. In some cases, the appraised value of the home will come back lower than the purchase price, which presents another obstacle for the completion of the transaction.

For these reasons and others, a real estate appraisal plays a central role in the transaction. Problems with the appraisal could delay the closing, or even stop the purchase in its tracks. Purchasers and sellers alike need to be prepared to deal with any potential obstacles raised by the appraisal as they go through the process.

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5635 N. Scottsdale Road
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Scottsdale, AZ 85250

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