Hello, it’s Phil Aitken. Many home sellers worry that when their home is visited by the buyer’s appraiser. 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 upon and that it meets the loan guidelines.
I bet you are wondering how often appraisals come in low. Low appraisal does not happen very 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. If the home does not appraise, then all parties are off the hook and any party can cancel the contract and get the binder money back. This doesn’t happen very often though.
Here are a few possible remedies for a short appraisal:
- The seller sells the home at the appraisal value
- The buyer pays the shortfall in value
- The buyer and seller split the difference.
So, 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 at (904) 544-5252
