What is an appraisal?
Do I need one?
What if my house doesn’t appraise?
If a buyer is getting a loan, then there will be an appraisal. Some buyers (not VA or FHA though) will waive their appraisal contingency, but that is not the norm. Plus, buyer’s typically will only waive the appraisal contingency if they are putting more than 25% down. So expect to have an appraisal.
The buyer pays for the appraisal, but no one can “pick” the specific appraiser assigned to the property. Appraisers are assigned randomly from a pool of appraisers. This was implemented after the housing collapse in 2007 in order to prevent inflated appraisals. Unfortunately, not all appraisers are created equally. And since the appraisal is ONE person’s opinion of a home’s value, it’s best not to leave that to chance. At the Doug West Group, we attend every appraisal and provide the appraiser with accurate information to help support a home’s purchase price. I’m not talking about sugar-coating and hand selecting comps. I’m talking about demonstrating with hard facts why a home is worth the purchase price. As the area experts, we have this data to provide to the appraiser. EXPERIENCE MATTERS!!!
If the home doesn’t appraise, there are four options:
- Buyer comes up in price. (The buyer did have extra reserves, right? This is important in the appraisal might be an issue.
- Seller comes down in price.
- Buyer and seller compromise and agree on a price somewhere between offered price and appraised price. This option, of course, requires the buyer to have those extra reserves.
- Buyer and Seller walk away and escrow is cancelled.
Obviously, option #4 is the least desired. The most common solution is option #3. The compromise, a win-win strategy.
You need a local expert to help you navigate potential appraisal issues. Inexperienced agents can cost you a lot of money. On the listing side, this might cost the seller tens of thousands of dollars. On the purchase side, a low appraisal can prevent the buyer from getting the house, yet the buyer is still out the cost of the appraisal ($400+/-). The Doug West Group knows how to overcome appraisal issues. Strategy matter! Experience Matters! Call us today if you’re considering selling or buying a home.