What is an Appraisal?
After we go through inspections, the next step is an appraisal, but what is an appraisal? Should I be nervous? No. There isn’t a huge reason for you to be nervous. Below and in the video we go through what an appraisal is and what it means for you.
An appraisal is an assessment of the property you are buying to make sure that it is worth what you want to buy it for. When you get a mortgage, the bank gives you money to buy the home, and you pay them back over time until you completely own it. Because the bank is giving you money, they take all of the risk if you were to default on your mortgage. It doesn’t happen very often, but the bank needs to know they can recoup their money if they have to sell the property in case of a foreclosure. So they send out a third party appraiser who is trained to go through homes and assess their value. The appraiser tells the bank what the home is worth and if it lines up with what we offered, then we are home free to closing day!
But what if it doesn’t line up? What if their number is different? It very rarely happens, but sometimes it can come up short or be higher. If it comes up short, then we talk with the seller about our offer and see if there is room for negotiation. If an appraisal comes out a bit higher than your purchase agreement, then its a win for you. However, we never expect it to come out thousands of dollars higher than what we offered. The appraisers know their job well and know what we want to purchase it for, so they won’t just come along and say a home is worth $25k more than your offer.
In all honesty, the appraisal is probably scarier for the seller than the buyer. When we get the appraisal back, our goal is to not get hung up on what the home appraised for, but rather to make sure it passed! As always with every step of the buying process, we’ll be right there to guide you through to the closing table!
Our goal with every real estate transaction to make the process fun and stress free for you! If you’re looking to buy a home, we can help you with your real estate goals! Contact us to start on your real estate journey!