What to Expect From an Appraisal

    Every home buyer has their personal wants and desires when looking for their perfect home. Their lender’s concern is the house worth the value of the loan you are qualified for. For that reason, they need to have the home valued by a third party, an Appraiser, that is neutral, meaning they are going to be unbiased when evaluating the value of the home.

    Appraiser is Neutral in the Transaction
    The appraiser is a state licensed professional that is contracted by the buyer’s lender to evaluate the home. They only job is to assess an opinion of value for the home. There are on nobody’s side as they do not represent neither the buyer or the seller or the agents or the lender.

    What do Appraisers look for to determine the value of the home?
    An appraiser will look at the location, the age, the condition of the home. They do take note of any upgrades, additions, or renovations done to the house. This is where the appraiser may reach out to the listing agent for a list of any upgrades the seller(s) may have done, they are not asking the listing agent for their opinion but only a list of upgrades. The appraisers take all this information and compare it to other homes in the same area with the same criteria.

    What happens after the appraisal is completed?
    Once the appraisal report is completed, the buyer and the lender will be provided with a copy of the report to review. There are three things that could possibly happen:

    1. The value from the appraisal report matches the price the buyer and the seller agreed to. In this case the loan will proceed to the underwriter for final loan approval.
    2. The value from the appraisal report is higher than the price the buyer and the seller agreed to. In this case the buyer gained immediate equity and the loan will proceed to the underwriter for final loan approval.
    3. The value from the appraisal report is lower than the price the buyer and the seller agreed to. In this case the buyer and the seller can re-negotiate the sales price, or they can agree to meet half-way on splitting the difference. Once there is a mutual agreement between parties then the loan will proceed to the underwriter for final loan approval.

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