Since your buyer is going to purchase your home with a mortgage their lender will require that it is appraised. Here the steps in the appraisal process:
- A third party not related to the lender randomly assigns the job to a licensed, certified, appraiser.
- The appraiser will schedule the appointment to visit your home like a showing.
- The appraisal typically takes about an hour or so.
- You do not need to be home for the visit, but unlike a showing you do not need to leave either. It’s up to you.
- The home does need to be show-ready.
- The appraiser will take photos and measurements of the home. Also the appraiser will make note of conditions that might affect resale.
- Once back at the office the appraiser will do a market analysis. The appraiser will try to find comparable homes that are within a 1 mile radius of your home, and are Active, Pending or Sold within the last 6 months. The best comparables will be similarly styled homes with similar square footage.
- The appraiser will send the final appraisal to the buyer’s lender about a week after visiting the home.
- The lender will inform the buyer’s agent, who will in turn inform us, of the results of the appraisal.
- If the appraised value equals or exceeds the purchase price we keep moving forward.
- If the appraised price is less than the purchase price the difference can be dealt with as follows (the agreed upon option must be determined by both seller and buyer):
- buyer increases down payment to make up for the difference
- seller decreases price to make up for the difference
- buyer and seller agree to settle on a middle ground to make up for the difference
- buyer and seller cannot agree so purchase agreement is cancelled and buyer gets earnest money back
- home goes back on the market to find another buyer
Once we hear back about the appraisal we’ll give you a holler. Let us know if you have any questions in the meantime.