THE DREADED AND MYSTERIOUS APPRAISAL
The appraisal is one of the most heavily anticipated moments in the transaction. The sellers hope the home is going to appraise at the negotiated value and the buyers hope that their lender will give them the loan. On either side of the transaction, the appraisal can potentially be a deal killer. Here is everything you need to know about appraisals!
THERE’S ALMOST NO WAY AROUND IT
Whether you’re getting a loan to buy your home, or you are selling a house, an appraisal will very likely be part of the process. The appraiser will use properties that have sold in the last 3-6 months within the area to help determine the value. The appraiser will also take into consideration the condition of the home, age, size and so forth. Our team uses Appraisal guidelines so our clients know the likely appraised value of the home.
IF THE HOUSE IS APPRAISED LOW…
It’s unlikely that your lender will lend the difference. At this point, there are 4 potential routes.
- The seller may hold to their original asking price and ask you to pay the difference in cash.
- The seller may drop their asking price to the appraised value.
- The buyer and seller may agree to meet somewhere in the middle
- Or an agreement isn’t made and the deal is dissolved.
Most agreements are based on the appraisal and are negotiated at that time if there is a need to do so. For many, this can be a nerve-wracking moment in the process, for our clients, they know what the home will appraise for BEFORE making their offer.
The typical home appraiser has a state license or certification in home appraisal processes from an accredited school or real estate training. This means that they are highly qualified to make an assessment of the final market value of the house. As a result, this figure is highly influential to the buyer in communicating how much the home is worth and in determining how much they are willing to pay.
AN APPRAISER IS NOT AN INSPECTOR
This is a common misconception amongst buyers & sellers. The appraiser cannot do structural assessments, termite checks, under the floor evaluations, or any of the other things that the home inspector can do. This is why it is highly advised to get a home inspection on any property you choose to buy. We hope we answered all your questions on appraisals, if you have any additional questions feel free to send us a message! For the free buyer, or seller guide simply click one of the links below! Thanks for tuning into this tip tuesday!