Everybody loves a bargain. Reasonable consumers expect to pay more for items of greater value and appreciate receiving discounts, especially for higher priced items like televisions, cars and homes. But what if it’s the other way around? What if you end up paying more than something is worth and you were led to believe that item was worth far more than it really is? In real estate, people are usually worried about low home appraisals when they are selling because they want to get as much equity as they can from their home. If the appraisal is too high, this could be a problem for the homebuyer.
How do home appraisals work?
The reason appraisals are made on homes for sale has to do with financing. No one wants to overpay for something, least of all banks, whose industry is money! Appraisals are actually a part of the mortgage process, where the seller of the home and the homebuyer must depend on the expert estimation of a stranger to estimate the overall value of the home. This estimation is used to determine whether or not a loan should be provided and how much the loan should cover.
Whom does the appraisal help?
The home appraisal exists to protect the people involved in the transaction of the home sale. There are essentially three entities protected through the appraisal process:
- The Seller – The seller is protected because the appraisal ensures he or she receives a fair price for a house, in which he or she has already invested money.
- The Buyer – The buyer is protected because the appraisal ensures he or she pays a fair price for the home: not too much, not too low.
- The Bank – Through mortgages, banks are the buyers or investors in the home since they are providing the funds for the homebuyer. The appraisal protects the bank from getting stuck with a property that is worth less than their investment.
What if you paid too much?
If you have already signed on your loan and paid too much for your home, you are in a complicated situation. An experienced real estate attorney can review paperwork and build a case to help you get your money back. At Robert Robles Law Firm in Oklahoma City, we offer free consultations to all of our clients, which are completely confidential. Call now at 405-232-7980 or fill out our contact form.