Hello, its Barb Schlinker. Many home sellers worry that when their home is visited by the buyer’s appraisal it may not pass. An appraisal is not another inspection. In fact, when the appraiser visits the home, they are usually there for less than 30 minutes, they take photos of the home, they will sketch the floor plan and take notes of any improvements or issues they see. The lender hires an appraiser to confirm the home is worth what the buyer and seller agreed uponcand that it meets the loan guidelines. I bet you are wondering how often appraisals come in low. its does not.happenvedy often. if the home is priced appropriately and it’s under contract near the price that is close to similar recent home sales, you won’t have to worry about the appraisal coming in low.
an appraisal is required in most cases by the buyer’s lender In order to have a neutral license 3rd party verified the home value. If a buyer is paying all cash for the home, there is no need for an appraisal. As a home seller, here is why you care about an appraisal:
1. An appraisal could come in less than the purchase price.
a. If this happens there are four options to continue with the sale:
i. The buyer could ask the appraiser to re-consider the value. (this is rare and often takes months if it works at all.)
ii. The seller could lower the sales price to the appraisal. That means the seller would receive less money at closing.
iii. The buyer could come up with the difference in cash to buy the home.
iv. The buyer and seller could negotiate in which the seller would take less, and the buyer would come up with some of the difference in cash to complete the sale.
2. The appraiser may ask for what they call “lender required repairs” to bring the home up to the standard to meet the buyer’s loan guidelines.
a. The word “lender required” does not mean the Seller must do the repairs. Many times, for the buyer to get the loan, buyers can and will do the repairs.
b. The things we see on lender required repairs are usually for VA and FHA loans, but I have seen repairs requested on conventional loans. Those repairs include:
i. Peeling paint on the outside of buildings
ii. Broken windows. large un covered window wells
iii. Missing outlet covers.
iv. Missing stair rails
v. Any safety issues: trip hazards, missing electrical outlet covers, any other thing the appraiser deems as ‘unsafe” Taking care of these minor repairs can do to help the appraiser agree that homes condition meets The loan guidelines. First, do your best to make the house look good during the appraisal. Often when the appraiser visits the home, most home sellers are in the process of moving so sellers fear the home is not quite “show ready”. This is not the time to panic. It’s okay. Try to make the home look neat and tidy. They can see the marketing photos and have a copy of the listing.
We provide similar sales as well as all the offer activity which is an indication of market demand. If you have any questions, please call our office at any time
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