Appraisals

Definition:

This is the process in which a licensed appraiser does a thorough valuation of a property or land to determine its true cost

Why Is It Needed ?

This is done so that the buyer and the lender can for sure know that the price they are paying for, for a home, is fair

What Happens IF The Appraisal Comes In Low ?

If you end up with an appraisal that comes in lower than what the buyer offered, the buyer and seller will need to renegotiate because the lender will not lend more than what a property appraises at

What Happens If The Appraisal Comes In High ?

If you end up with an appraisal that comes in higher than what the buyer offered. The buyer ends up with immediate equity, and in a sense a “discount” on the property. Sellers can not back out since it would be considered, breaching the contract

Tips For The Buyers

When putting an offer on a home be thoughtful about how much you’re willing to offer, because as mentioned, if it comes in low, you won’t get financed, and will need to put more money down out of pocket. Which if you have the money, perfect, if not, keep this in mind

Tips For The Sellers

If you get multiple offers, show the appraiser, so they know that the house was priced correctly. Also, be sure to attend the appraisal to make sure they do not overlook details, like any renovations you may have done

Things To Keep In Mind

Appraisals are beneficial to everyone because it makes sure that homes are sold at a fair price. Unlike stocks, properties are all different, and need to be valued correctly