If you are in the market to purchase a property, whether a condo, co-op, or apartment, you know that the process isn’t as straightforward as it may appear at first. One place that many potential homebuyers falter is in the pre-purchase stage of getting an appraisal on the desired property. But as you’ll soon see, getting an apartment appraised is a necessary part of the process that you shouldn’t skimp out on.
What is an appraisal?
Essentially, an appraisal is an estimate of the value of a property. This is a vital step in buying a home because it will affect the overall cost of the property and whether or not you will be able to successfully apply for a loan.
The appraisal is based on a number of variables that will affect the value of the property. Just like two identical hotel rooms can have different rates based on the view from the window, two similar apartments even in the same building may have vastly different values depending on whether they look into an alley or out onto Central Park. The floor number will also affect the appraisal, as will the condition of the apartment and the building as a whole. Even aspects as seemingly minor as the lighting or the distance to the elevator may contribute to the overall value estimate.
In New York City specifically, the appraisal procedure can get a bit complicated due to the sheer amount of variables that can affect the estimate. Some areas of the city are clearly much more desirable and will therefore achieve a higher estimate. Also considered will be the physical condition of the building and the maintenance fees required for living there.
Who Completes the Appraisal?
While it may appear at first glance that the appraiser is there to help you get the best value for the property, it is important to understand that the appraiser is linked to the lending bank and doesn’t work for you as an individual. The appraiser’s job during the home-buying process is to provide an unbiased opinion about the worth of a property, and not to necessarily help out either the lender or the buyer.
If you’re looking to purchase a property in New York, you can rest assured that the appraiser, whose wages don’t depend on commission of the sale of the apartment or condo, will give you an honest evaluation on the value of said property.
What if it Goes Wrong?
However, once in a while, it is possible that an appraisal isn’t accurate or reliable. This can often occur in New York City, especially if the chosen appraiser isn’t familiar with the specific neighborhood that the property is located in or with the nuances of the apartment that may affect its value. If the appraiser has to come into the city from much further away, chances are that they may not be the most suitable for the job.
If this happens, you can try your luck asking the bank to send a second appraiser, but it is likely that they will keep the first number regardless, especially if it is high enough to be in their favor. It is possible that they will average out the two appraisals, but you shouldn’t count on that being the case.
If you really feel that it’s all going wrong, you should discontinue your work with that particular lender and check out another bank entirely and hope for the best. It isn’t ideal, but it is most likely the safest route to take.