Appraisals: What to Expect
When you are buying or selling a home, the home appraisal, if a part of the deal, can really have an effect on the outcome. Below is a general idea of what Sellers and Buyers can expect:
•Pricing Your Home: Working with a knowledgeable real estate agent, and pricing the home properly. If your home is priced to the market, and based on comparable sales, the listing price should be close to the appraised value.
•Appraisal Contingencies: When accepting an offer, part of the negotiating can include an offer being accepted without it being contingent upon the appraised value, this can happen in a hot seller’s market. If the buyer is financing a portion of the sale, the lender will require an appraisal, and the loan will be based on that appraised value. Cash deals do not usually have appraisal contingencies.
•Do I Need an Appraisal? If you are obtaining mortgage financing, then your lender will require an appraisal and it will cost you $350-$500 on average.
•What happens if the appraisal comes in below the contract value? If the appraised value comes in lower than the contract sales price, you can negotiate with the seller to lower the contract price. The seller has the option to agree or not to lower the sales price. If the seller does not agree, and the contract is contingent on financing, then the contract can be cancelled and the escrow deposit will be returned to the buyer. If the seller is willing to negotiate and a deal is struck at a lower sales price, but still above the appraisal value, the buyer will need to come up with that difference with cash at closing.
•What happens if the appraisal comes in above the sales price? Congratulations, You purchased under market value! And you don’t even need to tell the seller.
I would love to help you with any questions you might have. Be sure to contact me for help.