Whether you are buying or selling a home, the appraisal can directly impact you. An appraisal is someone’s objective value of what a property is worth in today’s market.
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Many people have asked me, “What is an appraisal?”
An appraisal is someone’s opinion of value of what a property is worth in today’s market. Appraisals are fairly accurate. Usually, once a home is under contract, the bank will send out an appraiser to verify the value of the property.
You might not be aware that as soon as appraisers get a request to look at a home, they contact either the listing agent or the buyer’s agent and ask for a copy of the contract. They look at the contract to see what the sales price is, and then they look at the house to see if they can justify that sales price. The appraisal prevents the buyer from paying more money than the home is worth.
I would say that 95% of appraisals come in at the sales price, which usually makes buyers and sellers unhappy. Sellers get upset because they think their home is worth way more than the market value. Buyers get upset because they thought they were getting a bargain.
Although it’s common to be disappointed when the sales price appraises, you really shouldn’t be. The appraiser is only doing a favor to the bank to justify the sales price and make sure that the home is not worth more or less than what it is being sold for.
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If you are the seller, you need to make sure that the buyer’s agent and the lender are on the same page. The appraisal should be ordered as soon as possible because it can take anywhere from seven to 21 days to complete the appraisal. You can order the appraisal the minute the home goes under contract.
Do not be disappointed if the appraised value matches the sales price.
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Also, if you are the seller and the sales price does appraise, you will not see a copy of the appraisal. The buyer is the one who pays for the appraisal, so the buyer is the only one who should see it. If you are the seller and you do see the appraisal, that is a bad sign; your property did not appraise to the sales price.
Finally, keep in mind that appraisals for home sales are different than appraisals for refinancing your home. If you refinanced a year ago or even six months ago, that home appraisal has no value in the current marketplace.
If you have any questions about home appraisals or about real estate in general, give me a call or send me an email. I would be happy to help you!
