4 Things You Need to Know About Home Appraisals

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Most people don’t know much about the home appraisal process. Whether you are buying or selling a home, here are four quick points for you to consider:

1. How does an appraisal work? An appraisal is ordered by the bank and paid for by the buyer. The bank will order the appraisal because they want to know the home is actually worth the amount they are loaning the buyer.

2. Who does the appraisal? The bank orders the appraisal from a third party appraiser. The bank doesn’t want to work with someone who will be more favorable to the buyer or seller; they simply want an unbiased opinion on what the home is actually worth.

3. How does this process affect buyers? As the buyer, you want to make sure that the appraised value matches the amount they are offering for the property. If not, there is a problem. If the appraisal comes back short, you can walk away from the deal. If the appraised value is higher than what you are offering, you may either raise your offer or negotiate with the seller to come down. That can cause a little bit of contention, but that’s for your Realtor and the listing agent to deal with.

4. How does this affect the seller? As a seller, you believe that you have listed your home at the correct price. If there is a short appraisal and the buyer wants to lower their asking price, you have to negotiate with them. If the home appraises higher than you thought, the buyer might walk away if you ask for a higher price. Again, that is for your Realtor to handle. They will negotiate with the buyer’s agent. Maybe you will find a happy medium.

If you have any other questions about appraisals, give me a call or send me an email. I would be happy to help you!