An appraiser is a professional person who puts a value on homes for lenders and buyers. This person is highly trained, tested, and regulated and they produce a huge report that shows a property's value that is hard to argue with, in most cases!
When you buy a home and are getting a loan, the lender or bank will hire an appraiser that YOU will usually pay for at closing as part of your closing costs. When I work with buyers, I will include an addendum with the offer that states that the home MUST appraise for you to continue with the purchase. If it doesn't appraise, you can back out! Who wants to pay too much for a home? Most people don't! (Even if you are paying cash for a property, I will still suggest that you get an appraisal, but that is up to you! It is required by lenders.)
What if you are willing to pay too much for the property? That's OK too! And, that is your decision, but your lender will require you to come up with the difference.
When would I NOT add an Appraisal Addendum? If you are making an offer on a property that has several offers and I feel confident that the home will appraise due to the surrounding comps, I may omit this addendum to make your offer stronger! We would discuss this so that you would understand the process!
When you sell a home, your home will most likely be appraised because most people get a loan for purchases and it will be required by their lender. So, when I work with sellers, and that seller asks me to sell their home at a value that I think is too high, I will probably say, "Remember, it has to appraise". That's usually my hint to sellers that they are asking too much for their home and people will think something is wrong with it if it sits on the market too long. (Again, we never want people asking what is wrong with YOUR home!) If your home won't appraise, the buyers will either back out or ask you to sell your home at the appraisal value. That is your choice, but if one appraiser came up with that value, another one probably will too, so you are taking a gamble if you want to wait for another offer! You might be waiting for a cash offer for a very long time if you don't lower your price to the fair market price...and fighting an appraiser can take months! Is it worth it to you? Maybe.
Important to remember: When a home first goes on the market in a seller's market, most buyers won't make an offer less than asking price, so leaving room to negotiate will backfire because no one wants to negotiate until the home has been listed a month or so. If you want to sell your home quickly, you need to ask a fair price so that you will get offers immediately!
TIP: When you interview a Realtor to sell your home, ask to see comps and ask how that Realtor plans to sell your home, other than listing it on the MLS.
“The opinions expressed on this blog are my personal opinions, and they don’t reflect those of my company.”
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