It’s a fact, if you are a seller, and someone wants to buy your home, they will need an appraisal for their loan. Much of the time they will also want to have an inspection on the property as a contingency. The inspection usually comes before the bank gets around to ordering an appraisal. Most inspections cost the buyer $500 to $550. They usually pay before the inspection, or at the time of the inspection.
Now somewhere further down the purchasing cycle, the bank that the buyer decides to use orders an appraisal. The appraiser is from a pool of appraisers in our state. They may live more than 200 miles from your property. They may never see you property. There are no rules about this. They may use something like Zillow to do the appraisal on your property. If the appraisal comes in low for various reasons, your buyer may not be able to secure the loan to buy your house at the price you have agreed upon. You will now need to negotiate a new price. That is if the buyer wants to negotiate a new price.
Generally the bank will loan on the ratios they have agreed upon, but now on the current appraised price and not the contract price between you and the buyer. The buyer can ask for a new appraisal, but the new one may not be better than the last, and many banks will take the two and average them. And if you are the buyer, y0u have now paid to have an appraisal.
Is there an easy solution to this scenario? No. Top attorneys say that this real estate law procedure is not going away. As a seller what you need to do is price your home based on current comparable properties, not just on what you think your house is worth. And if you are a buyer, you too must consider the comparable sales and base your buying strategy based on the facts, not your emotions. A few years ago, it was relatively easy to get appraisal values and loans for properties even if there were no obvious comparable properties. That is no longer true.
The special amenities of your home will not carry as much weight has they have in the past. Short sales and foreclosures will be included in the comparables used by appraisers.
There is no way around it, be sure your home is priced right when you go on the market.
