How to Work with Real Estate Appraisers
Once you have found a buyer for your home and have worked out a deal,
one of the steps that will need to be broached in the process is to make
contact with a real estate appraiser. Working with a real estate appraiser is a
critical part of the process because if the home does not appraise for
at least the amount of the buyer's loan then you may find that great
deal you thought you had suddenly evaporates. This is because most
lenders will not be willing to make a loan for a home that does not
appraise for at least the value of the loan. In the event that the bank
had to foreclose on the home they would be essentially taking a loss if
they had made a loan for more than the appraised value of the home.
Should the home not appraise for at least the value of the loan, then
one of two things will generally happen. Either the contract on the home
will need to be renegotiated for a lower amount that does meet the
appraised value or the deal will fall through.
Generally, the real estate appraiser will be assigned by the mortgage company or the
loan broker. It is the job of the home appraiser to view the property and
provide an educated, experienced opinion regarding the value of the
property. The job of the real estate appraiser should not be confused with that
of the home inspector. The home inspector is the professional who
examines the structural issues of the home.
The actual appraisal of the home can vary in terms of depth. It may
include an interior as well as exterior survey with measurements and
photography. The home appraiser may also perform some additional research in
the surrounding neighborhood in order to obtain information regarding
comparable recent sales.
The actual depth of the appraisal will often depend on the type of loan
that the buyer is obtaining. In the event that the buyer is purchasing
the home with a large down payment then the lender may require only a
cursory appraisal due to the fact that there is not as much risk with
the loan. With a smaller down payment, the lender may require a much
more in-depth appraisal.
For the most part, real estate transactions today are requiring full
appraisals due to the current state of the real estate market. The
process can certainly make a buyer nervous, as well as a seller, for
that matter.
Regardless of which type of appraisal will be performed, when you are
waiting for the real estate appraiser to arrive, the best thing you can do is to be
friendly and show them around the property. If you have pets, make sure
that will not be in the way of the real estate appraiser. Keep in mind that the
appraiser will essentially be looking for possible damage to the home as
well as any improvements that have been made to the home. While you need
not necessarily hire an entire cleaning crew to come out to the
property, you should be aware that a real estate appraiser will likely pick up on
any odors that hint at mildew or mustiness because this could mean that
the home is in need of mold-remediation. Depending on the nature of the
appraisal, the real estate appraiser may also wish to view the air conditioning
and/or heating unit in order to check its condition. In order to
facilitate the process, you will need to make sure that access to the
equipment is clear. It is also a good idea to have a couple of
flashlights on hand in order to easily access areas that may be dark.
On the exterior of the property you need to look around the surrounding
neighborhood to ensure that your landscaping is comparable to other
homes. If not, then you need to either get the mower out or hire someone
to come out and handle it for you. Remember that the real estate appraiser will be
comparing your home to others in the neighborhood that are for sale or
have sold recently, so you want to make sure that your home is at least
in keeping with those homes. Even if the real estate appraiser is due out in the
next day or so, it is never too late to trim the grass and have hedges
and trees cut. Every little thing you can do to make your home stand out
and appear in good repair will certainly go a long way toward helping
you to receive a favorable home appraisal report.
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