Why Home Appraisals?
A
professional appraisal protects both the lender -- so they don't lend too
more than a property is worth -- as well as they buyer -- so they don't PAY
too much. If a buyer gets into the heat of the moment and offers a
silly (too high) price on a home, the appraisal will often flush it out.
Who Does the Real Estate Appraisal?
The appraisal will be done by a professional appraiser -- in virtually all cases one selected by the lender. Unlike a whole-house inspection,
where the buyer should accompany the inspector, buyers rarely are
present when an appraisal is done. In most cases, the buyer does not
even know the appraisal has been done until after it is completed and
is in the lender's hands.
Where can we find an appraiser?
You will need an appraiser in your local area. We know of many appraisers in the areas we service. Contact us for more information.
Who Pays For The Appraisal? How Much Does an Appraisal Cost?
In
the vast majority of loan situations, the buyer pays for the appraisal,
generally at the time of the original mortgage application. The
appraisal fee usually runs somewhere between $ 300 and $ 500. This
appraisal fee is in addition to the credit check fee ($ 40-60) which is
also collected at the time of application.
What if Real Estate Values Set by an Apprasier are Too Low?
If
the real estate values set in an appraisal are lower than the maximum amount the lender is willing to
finance, then the loan cannot proceed unless either the seller lowers
the price or the buyer increases the amount of their cash down payment,
meaning a re-opening of negotiations for the home purchase. Although a home
appraisal is not locked in stone (miscalculations may have been made, for
example) and there may be some "wiggle-room" in the appraisal numbers,if the appraisal comes in considerably below what you have offered to
pay, your first inclination should be that you are paying too much.
How Do a Real Estate Appraisal and an Inspection Differ?
A
house inspection is concerned only with the condition of the
home. In an appraisal, condition is only part of a larger
picture -- including size, neighborhood and general location. Although an
appraisal will address the condition of the home (for example, if it
needs a new heating system or roof) it should NOT be relied upon as a
final determination of the quality of the property. A house
inspection is a buyer's best protection against potential defects in
the home they want to buy.
Summary
Although
an appraisal is another cost that must be absorbed by the buyer, it can
be money well spent. An investment of a few hundred dollars may prevent
a buyer from paying more than what a property is worth. For this
reason, we have some reservations with mortgage programs which have
recently introduced options for either foregoing a traditional
appraisal or obtaining only a "watered-down" (for example, driving by
the home only) one--especially since the buyer usually has to pay a fee
for this service. The $ 300 to $ 500 fee for a full appraisal could
prevent paying thousands of dollars too much for a home.
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