If the buyer is using a mortgage to buy your home then the lender will require that an appraisal be conducted. So what is an appraisal?
Who orders the appraisal? The buyer’s mortgage lender orders the appraisal, but the buyer pays for it.
When does the appraisal occur? Usually during week day hours.
Do I need to attend the appraisal? No, you will not attend the appraisal. The appraiser will have access to your home through the Supra (real estate agent) key box.
How long does the appraisal take? Depending on the size of the home, it could take up to two hours.
How long until we know if the property appraised for the purchase price? Usually a week to 10 days after the appraisal appointment. Once the report is written, the buyer’s mortgage lender forwards it to the buyer to let the buyer 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 process will proceed forward as planned. If the property appraised for less than the purchase price, this is an issue that will need to be addressed in one of several ways. That means the bank will only give the buyer a loan for the appraised value. In this case, the buyer will often come back to us and ask to renegotiate the purchase price down to the appraisal price. If we say no then the buyer has to come up with cash at closing for the difference between the appraisal price and the purchase price and some buyers can’t or may not want to do that. For instance, if the purchase price is $800K, but the appraisal only came in at $775K and we will only agree to lower the price to $785K then the buyer has to decide if he or she is going to bring an extra $10K on top of the down payment and closing costs to closing or walk away from the deal. If the buyer walks away, his or her earnest money is usually refunded in the case of a low appraisal.
In a robust Seller’s market it would not be uncommon for a Buyer to either to waive the appraisal contingency or contractually agree to pay additional funds toward the low appraisal.
As always, if you have any questions, don’t hesitate to contact us. Thanks!
STEVE HILL
Broker | REALTOR® | Luxury Advisor | Premier Director
CELL 206-769-9577
SANDRA BRENNER
Managing Broker | REALTOR® | MCNE | SRS | CRS®
CELL 206-271-7100
WINDERMERE REAL ESTATE / FN
12250 Greenwood Ave N
Seattle, WA 98133
MAIN 206-367-4720
brennerhill.com
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