The appraisal process is started by your lender to substantiate for the lender that the home is valued the price you agreed to pay and that home meets the loan guidelines. Typically the lender reaches out directly to the listing broker to visit the property.
Once the appraisal gets turned in to your lender, you lender should let you know if the appraisal price is at or above your sales price and it meets the loan guidelines. You can get a pretty good idea about loan guidelines are ok as long as the home does not have:
- Peeling paint on the outside.
- Missing outlet covers
- Missing stair rails
- Any safety or trip hazards
- Any broken windows
If the appraisal comes in below the sales price, unless the seller lowers their price, you would have to come up with the difference in cash. This is another point of negotiation that takes place between you and the seller.
The lender required repairs I just mentioned are also negotiable.
I had one buyer that got VA financing on a home that had most of the repair issues I mentioned. But the seller was offering the home strictly as is. So the way we worked it out, the buyer agreed to do the repairs so it passed the appraiser and that buyer got a great home for a great price, and the seller did not have to do any repairs and both were very happy.
How Does the Appraisal Process Work For Buyers?
When you buy a home, the appraisal process is an essential step. Now that you’ve made it this far, we’ll explain what happens next.
Typically your lender orders the appraisal to substantiate the value of the home you agreed to buy. They want to ensure that it meets the loan guidelines. Let’s talk about the whole home appraisal process and its impact on your home buying experience. Here’s what to expect during an appraisal process in Jacksonville.
What is a home appraisal?
The home appraisal process involves a report that determines the value of a property. It’s performed by a professional appraiser who is licensed by the state. Appraisers typically use things like these to determine a home’s value:
- Recent home sales in the area
- Neighborhood and location
- Upgrades
- Renovations
The appraisal report is essential for lenders. It allows them to determine if the home is worth the sales price and meets the loan guidelines.
How does the home appraisal process work?
Your lender will contact the listing broker to visit the property. Then, an appraiser will visit the property and conduct a thorough inspection. They’ll spend time determining the condition of the home.
After the inspection, the appraiser will complete an appraisal report that details the home’s condition and value. Next, the appraiser sends your lender the report. Your lender will then pass the results on to you as the buyer.
What do home appraisers look for?
During the appraisal process, the appraiser will examine the entire home and assess its condition. They’ll look for any issues like:
- Peeling paint on the outside
- Missing outlet covers
- Missing stair rails
- Safety or trip hazards
- Broken windows.
The appraiser will also consider recent home sales in the area, upgrades, and renovations.
What happens if the appraisal comes in below the sales price?
If the appraisal price is below the sales price, the buyer will have to make up the difference in cash. Another option is to negotiate with the seller to reconcile the difference.
Lender-required repairs are also negotiable. In some cases, the seller may offer the home strictly “as is.” When this happens, the buyer may choose to do the repairs necessary to pass the appraiser’s inspection.
Case Study from Phil’s Experience
One of Phil’s buyers purchased a home with VA financing that needed repairs. The seller was offering the home strictly “as is.” The buyer agreed to do the repairs necessary to pass the appraiser’s inspection, and the seller did not have to do any repairs. The buyer got a great home and a fantastic deal, and both parties were happy.
Let us Know If you Have Any Questions
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Give us a call right away at (904) 544-5252 if you need help. You can also use the form on this page and we’ll be in touch right away. And if you need to sell your current home, we can help with that too!
