Your lender needs an appraisal to make sure the house you’re trying to buy is valued at or above the price you’re paying for it. That makes sense because it’s important for the lender to make a wise financial investment. If they loan you money for a house, and the house isn’t worth what you’re paying for it, they put themselves in a bad position. As the buyer, it’s natural for you to be a little bit worried about the appraisal. It needs to come back high enough for you to be able to qualify for your loan and get the house you want. With these house appraisal tips you can feel better about the process and have less stress, while still having a good understanding of what’s taking place.
1). Is it really worth all that worry?
All the worrying you’re doing about the appraisal probably isn’t actually necessary. It’s understandable that you have concerns, but ultimately worrying about it won’t help the process. It will only serve to add to your stress levels. The majority of homes appraise at or above their asking prices, so that should help you put your mind at ease. If you’re buying a very unique property or something that’s hard to find comparable properties to judge it against, it’s possible that you could have some trouble with the appraisal. Still, there’s no reason to look for trouble beforehand. By assuming the best you won’t worry so much, and you can focus on getting past the appraisal and moving through the home buying process toward closing.
2). Do you know when the appraisal will be done?
By choosing the right house for your needs, you’re well on your way to being a home owner and enjoying all that the home and the area has to offer. You just need to get through the appraisal. If you know when it will be done, you can expect to hear the results of it just a few days later. Appraisers have to determine the value of the house and prepare a report on it, which they give to the lender. Then the lender will contact your real estate agent and let them know the results. You’ll hear from them about the appraisal so you can work with them if there’s any problem. There are generally always options to consider.
3). How much communication do you have with your lender?
The more closely you work with your lender, the better off you’ll be when it comes to your appraisal. That doesn’t mean you want to call your lender every day, asking if the appraisal has been done. Lenders are busy people, and they need to move through their day without too many interruptions. You do want to keep in contact with them, though. Try to get all of your questions about the appraisal together, and address those questions in one phone call. That way you call your lender less, but you still know everything you want to know about the appraisal, giving you plenty of good information about your home buying plans.
4). Can your agent help?
Your agent can’t really help with the actual appraisal, but they can often give you their knowledge and insight about the process. They will have a pretty good idea of what the home will appraise for, and may be able to work with the lender to get you any information from the appraiser as soon as it comes in. By doing that, your agent will make things easier for you and will also help ensure that you know right away if there are any problems.
5). What do you know about the comps?
When you’re buying a home, there are homes around it that have probably recently sold, as well. The appraiser will use those homes as comparable properties, in order to help arrive at a value for the home you want to buy. The value of the home is based on what it has to offer in the way of condition, square footage, and number of rooms, but also on how much similar homes in the area have sold for recently.
6). Are homes selling fast?
If homes are selling quickly in a hot real estate market, the value of those homes will generally go up. Anything that’s in demand can often be priced higher than something people are less interested in. That higher value will make it easier for you to buy the home because it means a better chance that the home you want will appraise at or above the purchase price. In a very slow market, it can be harder to place a high value on homes and harder to find other recent sales to compare them to.
7). Can you appeal the appraisal?
The more you know about the home appraisal, the less stress you’ll feel during the process. If for some reason the appraisal comes in too low, you can talk to your agent and your lender about an appeal. These aren’t often successful ,but they can be in some cases. It’s always possible that the appraiser missed something important about the house, or failed to include an important comparable. That could change the appraisal, and is worth asking about to help you get the house you want.
2 Point Highlight
The more you know about the home appraisal, the less stress you’ll feel during the process.
Your lender needs an appraisal to make sure the house you’re trying to buy is valued at or above the price you’re paying for it.
