The Real Estate Appraisal Process in Monmouth and Ocean County, NJ
Our Experienced Attorneys Help Clients Navigate the Home Appraisal Process for Real Estate Deals in Toms River, Freehold, Eatontown, Barnegat, Monmouth Beach, and nearby communities
If you’re considering purchasing a home in New Jersey, you’ve likely become familiar with the various steps to the process and some of the associated fees. While the process of moving into your dream home may seem convoluted and intimidating, a real estate agent and real estate attorney can be invaluable allies from scouting to closing to ensure that you get the best deal on your dream home possible, as well as cross all the t’s and dot all the i’s required to ensure that you’re able to secure a mortgage loan and the property sale closes without a hitch.
Contact a member of our team at Bronzino Law Firm to support the efficacy of your buying experience in Sea Bright, Tinton Falls, Long Branch, Middletown, Point Pleasant, Lavallette, Beachwood, Manchester, and surrounding communities. You can reach us at (732) 812-3102 for a free and initial consultation, or you can also complete our online form, and you will hear from our staff soon.
Breaking Down the Appraisal Process in a Real Estate Transaction in Toms River
A home appraisal is an objective third party’s estimate of the market value of the property provided to the mortgage lender to ensure that a home loan does not supersede the actual value of the property. During the closing of a house, the mortgage lender will appoint a certified home appraiser to use a multi-step approach to accurately appraising the home. This objective third party will provide an estimate of the home’s market value to the mortgage lender and purchaser. This amount is gleaned from a multifaceted review of the property using in-person inspection; information regarding the property such as its age, size, layout, square footage, build quality, any recent renovations or repairs; sales reports of comparable properties; and current market trend data. From this information and using various formulas, the appraiser prepares a report of the land and property estimate.
Main Objective of a Home Appraisal
A home appraisal determines the estimated value of a home. It is an essential element of a property purchase, as its objective is to provide the mortgage lender with the home and property’s estimated market value so that the mortgage lender can ensure that the loan requested is not more than the home’s actual estimated market value.
Who Requires the Appraisal during the Purchase/Sale of a Property?
The mortgage lender is the party that will require a home appraisal in the case that a home mortgage is sought to finance the purchase. A buyer can request their own appraisal if they so choose, though this is not a mandatory obligation.
Major Benefits of an Appraisal before Closing on a House
The primary benefit of a home appraisal lies with a lender. However, a buyer also benefits from an appraisal. First of all, a buyer can use an appraisal to negotiate a lower price on the property. If the market value determined by the third party appraiser is lower than the asking price, the ball is in the buyer’s court to pitch an offer that is certainly no higher than the figure determined by the appraiser.
Additionally, most mortgage lenders require that a buyer pay mortgage insurance. Until around 80 percent of the home’s value has been paid off, this insurance is included in the mortgage payments. Once 80 percent of the appraiser’s figure has been paid, the buyer can request that their insurance be canceled.
Home Appraisal Average Fee in New Jersey
A New Jersey appraisal costs between $300 and $500, depending on the size of the property to be appraised and its state.
The Buyer or the Seller, Who Pays for the Appraisal?
The buyer is responsible for covering the cost of the third-party appraiser, either immediately or as part of closing costs.
Possible Scenarios after the Appraisal Value is Determined
There are three potential scenarios of a home appraisal:
- Either the appraiser comes back with a market value figure that aligns with the buyer and seller’s agreed upon amount and therefore the requested loan amount;
- or the appraiser comes back with a higher figure, in which case the mortgage lender is in the black;
- or they come back with a lower figure, in which case there is a problem that needs to be resolved.
If a house is not appraised at the agreed upon amount, the mortgage lender may reduce the amount that you can borrow, as they don’t have an adequately-valued home as collateral, according to the appraisal report. In this case, the buyer can appeal, requesting a second appraisal. The buyer can also renegotiate the home price with the seller. Or, if the seller won’t budge, the buyer can pay the difference in cash.
Call a Real Estate Attorney for Help with Every Step in the Appraisal Process in Sea Girt NJ
As you can see, the results of an appraisal can make a marked difference in the home buying process and even whether you finalize the purchase of your dream home. For this reason, it’s essential to have the support of a real estate attorney during the appraisal process, addressing legal issues that could arise in the appraisal and affect the home purchase, such as violations or title issues. Because you have the legal right to walk away from the table with a buyer who does not lower their price to match that of the appraiser, receiving your full deposit back, should you need to take the seller to court for violation of this, you’ll need a real estate attorney by your side.
Contact us at Bronzino Law Firm for a free consultation regarding your home buying process. We pride ourselves on supporting clients in Red Bank, Rumson, Ocean Township, Bay Head, Mantoloking, Lacey, Ocean Grove, and elsewhere in Ocean and Monmouth County in locking in their dream homes. Do not wait any longer to schedule your free consultation and contact our lawyers by calling (732) 812-3102. We look forward to making sure your investment is protected throughout the home buying process and into your new life.