Do Honolulu Home Sellers Need to Pay for an Appraisal?

Honolulu home sellers who are thinking about selling their house may be thinking about their impending appraisal.  An appraisal is usually completed when a home buyer is interested in the home and has made an offer. The appraiser will then come through the Honolulu home and provide a value.  

Many Honolulu home sellers want to get an appraisal done before putting their home on the market.  However, this can hurt the sellers’ chance of making a profitable sale.  

Get a Home Appraisal Late

The purpose of an appraisal is to show a lender that a Honolulu house is worth the amount that is being offered.  There is little value to an appraisal to a homeowner who is simply trying to price their home. Getting an appraisal that is higher or lower than expected can make it difficult to sell.

Plus, the homeowner will not need to spend the money on appraising the home.  Most home sales leave this to the buyer to pay for as it is their lender who requires them to have it.  

Keep in mind that even if Honolulu home sellers choose to complete an appraisal a second one will need to be ordered by the buyer for the lender to approve.  This is to ensure that the home buyer has an unbiased appraiser look at the property.

Market Value

Many people confuse the terms of “market value” and “appraisal value.”  While they sound like two words for the same term, that is not the case.  

“Market value” is the value that a buyer is willing to pay for the Honolulu house.  This can be influenced by many aspects like the real estate market, the competition in the area, and even the home buyer’s feelings about the house.

Meanwhile, the “appraisal value” is actually about the Honolulu home and what has been completed on the home over the years.  These two values are both important to home sellers who will hope for a high market value and an appraisal that comes under what the home buyer is offering.  However, it is not up to the seller to determine either of these values.  

Finding Market Value

Market value is different because it is not found by simply using an appraiser.  Instead, the value can be found by finding the comparable homes in the Honolulu area.  

These comps will be Honolulu houses that are similar in every way to the home and have recently sold, within the last few months.  Comparing these houses will help to find the market value of the home.  

Spend Wisely

An appraisal is not something that Honolulu home sellers can simply order and forget.  It is an expensive process that can change how the homeowner views their home for better or worse.  Most homeowners will spend at least three hundred dollars on an appraisal but it can cost upwards of five hundred depending on the size of the land and home.

Even though Honolulu home sellers are often eager to find out the value of their home they should wait until they have a buyer.  The buyer will foot the bill for the appraisal. At this time they will also be locked into the contract unless they have contingencies letting them leave the deal if the appraisal comes back differently than expected. 

There are definitely pros and cons to getting an early home appraisal. Making the decision to do so depends on what the home sellers’ plans are in terms of being willing to update or make repairs.