Your lender will require an appraisal for you to get financed on your house, and avoiding mistakes with that appraisal is very important to get the loan you need. All home appraisals provide the same basic type of information to the lender, but not all appraisals are identical. In some cases, the appraisal won’t come in where you’d hoped, and the value of the house will be deemed too low for the purchase price. If that happens, there could be some options to get the value raised, but they aren’t always successful. While you can’t control the appraisal, there are some common mistakes you can avoid. That will give you the best chance of a good appraisal, which means the opportunity to get the loan you need and close on the house you want.
1). Do you need to be there?
Under no circumstances should you be there. Whether the seller still lives in the home or it’s vacant, the buyer’s presence isn’t requested at an appraisal. Not only might you being there bother the seller if they still reside in the home, but it might also bother the appraiser. You don’t want the appraiser to be distracted by your presence because they might miss something that’s very important for the value of the home. It’s understandable that you want to know whether the home has appraised at a value that’s high enough for you to get the loan, but the appraiser might not know that until they gather all the information and complete their report. Your lender will contact you when the appraisal has been completed and sent to them.
2). Should you talk to the appraiser?
It’s exciting when you buy a home, and you generally want to be involved with all of the process. That includes the appraisal. Still, you shouldn’t try to contact the appraiser before, during, or after the appraisal has been conducted. In most cases, you won’t even know who they are, because that information generally isn’t provided to the buyer. The appraisal is for the lender, and the only thing that should matter to you is that it can back high enough to let you get your mortgage loan and your house. Appraisers are professionals and are often very busy, so you want to let them do their job and move on. Then you can head toward the closing table with confidence.
3). Can you file an appeal?
When it comes to making sure you get the right appraisal information, you want to work with your lender so you can close on the house you love. Sometimes, though, an appraiser does make a mistake. There may be comparable homes that they don’t realize they should include, or something specific about the house that they overlooked. If that’s the case, you may want to consider filing an appeal. These aren’t always successful, and there has to be a good reason. It’s not realistic to appeal just because you don’t like the valuation, as long as that value has been based on the correct facts. However, you can appeal for appraisals that may be factually incorrect. It could help you get into your home.
4). Should you pay for a second opinion?
You want to be sure you’re getting a home that’s priced properly. If you disagree with an appraisal and can’t appeal, or if you appeal and it’s unsuccessful, you may want to ask about getting a second opinion. The seller and the lender will need to be notified, and your real estate agent can discuss the issue with them. As a buyer, you can’t order the appraisal yourself because the home isn’t yours yet. If the lender and the seller won’t agree to having another appraisal, your home deal may be done. That’s unfortunate, but it does sometimes happen with appraisals that are too low or on properties that are very unique and hard to find an accurate value for.
5). Do the inspection results matter?
Inspections and appraisals aren’t the same thing. One is for the buyer (the inspection) and one is for the lender (the appraisal). An appraiser won’t take the inspection into account because they aren’t concerned about cosmetic issues and other problems. They probably won’t even see the inspection report. They’re looking for a sound structure and working systems, but they’re also focused on the size of the rooms, the location, and other factors. That includes what similar homes in the area have sold for recently. Because the inspection results aren’t an issue for the appraiser, they won’t be focused on light bulbs that are out or a carpet that may need replacing.
6). How much do the comps affect the value?
The comparable houses that have recently sold in the area can have a big affect on the value of the house you want to buy. That’s because these houses have already been purchased, and that gives the appraiser a good idea of what homes in the area are really selling for. What the market will allow is vital to valuing a home, because houses will only sell for what people are willing to pay. If homes in the area have been selling well recently, and for higher prices, that is good for your appraisal, because it will raise the value of the house you want and help you close the loan.
2 Point Highlight
When it comes to making sure you get the right appraisal information, you want to work with your lender so you can close on the house you love.
Your lender will require an appraisal for you to get financed on your house, and avoiding mistakes with that appraisal is very important to get the loan you need.
