Appraisals – The Real Estate Industry’s ‘Four-Letter’ word – And How It Can Effect The Seller
Success! Your house is under contract! You’ve negotiated a price, a closing date, the Buyer’s loan is pre-approved, and you’ve hired packers. Not so fast!
Now your home has to pass the lender’s property condition test – meaning it has to appraise.
An appraisal is an independent, professional opinion of value. Let’s
repeat that. VALUE is the appraiser’s OPINION of what the property is worth. It is based on sales data, CURRENT market conditions, location, neighborhood, and other factors. Your home value today, probably won’t be the same next
It has NOTHING to do with what a buyer is willing to pay, or what a seller is willing to accept for the sale of their property!
There are many factors involved throughout the appraisal process – ONE is that appraisers are only as good as the data that is available to them. The seller should provide a list of all the property improvements
completed, with receipts, to their agent who will add comparable sales information, and provide it to the appraiser who will verify it during the process.
There is much hate toward
the appraiser from all involved when that opinion doesn’t meet contract price.
If the appraisal is lower than the contract price the lender usually won’t approve the
buyer’s loan. The seller will have to lower the price or the buyer will have to come up with more cash, or the ‘Deal Will Fall Through’. Your agent can help you dispute it – but it’s not always successful.
Remember, if you want to avoid the pain of a low appraisal – hire an agent to help you price the property RIGHT in the first place!
Gina M. Sohmer, is a veteran, a 2nd-Generation REALTOR®, a Graduate of the REALTOR® Institute, a Seller’s
Representative Specialist, and a member of the Phyllis Browning Company. You can reach her at www.ginasohmerrealestate.com.