So you fixed your credit score, saved enough for a down payment, know what you can afford, selected a real estate agent, and found a home you like, and made an offer that the seller accepted! That’s a bunch of work but just because the seller accepted you offer doesn’t mean the buying process is over. Now all the fun detailed financial work begins. The first thing the bank will want to know after the seller accepted your offer is how much THEY think the house is worth. They will assign an appraiser to do this. This “Buying a House Series” is made with years of experience on the best way to get your ducks in a row so you can get a loan and find the home you want at the price you want. Use the following the tips below to make the process much smoother on you…
Home Appraisals Are Home Valuations Completed By a Third-Party
The appraisal process is similar to getting comps, like you did to figure out what to offer, but it’s an attempt at an exact valuation. The appraiser will take into consideration the condition, the square footage, location, and any additions or renovations to the home. Appraiser are trained to be unbiased and they have no agenda but to find the right valuation. Your bank and you will get the results of their appraisal. Appraisals don’t have to take a large amount of them and could only require a 30 minute walkthrough by your appraiser. They aren’t home inspectors looking for every little detail. They do look for large problems with foundation, roofs, etc. They also take into consideration the quality and condition of the appliances, plumbing, flooring, and electrical system.
Remember That You Pay for the Appraiser but That They Are Working for the Lender
Even the appraiser is working for the Lender, it’s a crime for the lender to coerce or put any pressure on an appraiser come back with a certain value on the home. Appraisers are also protecting buyers from spending too much on a home. The appraisal helps both the you and the lender. If an appraisal comes in low then the seller can reduce the price on the home or they won’t be able to sell it since lenders won’t being willing to overpay for a property. Most contacts are contingent on the appraisal. If you have this contingency in your contract, and the appraisal comes in low, then you can walk away from the deal and get your earnest money returned.
If You Still Want The Home At the Agreed Amount, There Are Options
- Come up with the extra money cash to cover the difference between the appraisal and offered price
- Ask the seller to cover the difference
- Challenge the appraisal and pay for a second opinion.
Once you’re through the Appraisal, you’ll be on to the Home Inspection…
Buying a House Series Posts
- Buying a House Series – #2 Tips on Saving Up for a Down Payment on a Home
- Buying a House Series - #1 How Do I Check My Credit Score? How Do I Clean Up My Credit Score?
- Buying a House Series #11 - Tips for a Successful Final Walkthrough
- Buying a House Series #10 - Knowing Where and How to Negotiate On Your Closing Costs
- Buying a House Series #9 - Tips On Getting The Best Home Loan in the Cincinnati / Northern Kentucky Area
- Buying a House Series #8 - A Thorough Home Inspection is a Crucial Step To Buying a Home!
- Buying a House Series #7 - The Bank Will Need to Appraise the House You Want to Finance
- Buying a House Series #6 - Making an Offer On the Home You Want
- Buying a House Series #5 - Finding the Right Home For Your Family in the Cincinnati / Northern Kentucky Area
- Buying a House Series #4 - Tips On Finding the Right Real Estate Agent in the Cincinnati / Northern Kentucky Area
- Buying a House Series - #3 Tips on Finding Out How Much You Can Afford to Spend on Your Next Home
Tom Reese has 20+ years experience in helping his clients buy the homes they want at a price they can afford. Tom has helped his clients buy and sell property in every neighborhood in Northern Kentucky and Cincinnati.
About Tom Reese
Helping my clients attain their dreams has been the foundation of my success. With my strong attention to customer service, I have earned my clients continued support and referrals. Put my enthusiasm and dedication to work for you!
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