Congratulations! If you’ve gotten this far, it means you’re past the investigations and inspections period. Now it’s time for the appraisal.
What is the appraisal? Read this blog post to find out!
Who orders the appraisal? Your mortgage lender is the person who orders the appraisal. Generally the cost is somewhere between $400–$500 and is considered part of your closing costs.
A few tips about the appraisal:
- You do not need to attend.
- The buyer’s agent does not attend either. Only the seller’s agent attends.
- Once the appraisal is ordered, it generally takes about a week or two for the appraiser come to conduct the appraisal and prepare the report.
- Once the report is written, it’s given to your mortgage lender. Your lender will then forward it to you to let you know whether the property appraised at the purchase price, below the purchase price, or above the purchase price.
- If the property appraised at the purchase price, nothing further needs to be done and the closing will proceed as planned.
- If the property appraised for more than the purchase price, congratulations! That means we got you a great deal and you’ll have instant equity in your home on the day you move in!
- If the property appraised for less than the purchase price, we have a problem. That means the bank will only give you a loan based on the appraised value. In this case, we then go back and renegotiate the purchase price down with the sellers, ideally to the appraisal price. If they won’t come down to the appraisal price, then you can choose to either walk away and get your earnest money back or bring the additional funds to closing. For instance, if the purchase price is $200,000, but the appraisal only came in at $175,000 and the sellers won’t go any lower than $180,000, you have to decide if you’re going to bring an extra $5,000 on top of your down payment and closing costs to closing or walk away from the deal.
Questions? Call or text me at 405-585-6580 or email Steve@SoldonShawnee.com.