Asked by: Nohara Cazalilla
asked in category: General Last Updated: 10th April, 2020

Do new construction homes need appraisal?

Your mortgage lender will require an appraisal of your new construction home before approving your loan to ensure the property is worth the amount of the loan it's contemplating extending to you. However, new construction home appraisals can cause lenders problems because comparable homes may not exist.

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Keeping this in view, can you appraise a house under construction?

appraiser can take: determine an “as-is,” or a “subject to,” appraisal value. place when a house is still under construction or in the middle of a renovation. completely finished. work is complete on the home.

Secondly, how long does an appraisal take for new construction? The appraisal itself can take two to four weeks or even longer if the area is farther away from where the appraisers work and live. Keep this general timeline in mind as you're getting into the appraisal process.

Also know, how are appraisals done on new construction?

Appraisals for new construction are based on comparing the proposed new home to recently sold homes similar in size and features. Since most sales are from existing stock, appraisals for new homes are often less than the cost to build them. This often prevents banks from lending the full amount needed by the buyer.

What happens if new construction does not appraise?

When you take out a construction loan, the lender bases your loan amount on the “improved value” of the property. If the newly-built house does not appraise for at least its estimated value, you have some of the same options as any home buyer – try a new lender, get a new appraisal, or get the builder to take less.

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