The Appraisal…
Kathy Riggs April 26th, 2009
Welcome back to the continuing journey to home ownership as we are taking the trip in the buyer’s car. If you have been following the series you know the buyers have found a house and have had inspections. If you haven’t been following the posts, scroll down to see the road we have traveled.
As you remember, the time between offer acceptance and and closing is the period when the lenders and attorneys complete their work. Two of the most important jobs, the appraisal and title search, are completed without buyer involvement.
Let’s take a look at the appraisal.
If a buyer is financing the home purchase, the lender will want to order an appraisal to determine the “market value” of the property. Market value is the most probable price a typical buyer will pay for a property in an open market that has reasonable exposure and all parties are acting in their best interest. The financial institution wants to be assured their interest is protected and the property will be marketable in the event buyer defaults. It is important that buyers understand the market sets the value of a home and the appraiser determines that value by inspecting the house and comparing it to recent sales of similar properties – called comps – in the same market. Regardless of what the national news media is broadcasting, all markets are local and features important to buyers in one area of the country might not be desireable in other areas. Supply and demand also affects market value.
So what, if you are paying cash for the home? Is an appraisal required?
No, but the buyer may have one. This time the buyer would hire the appraiser and the work would need to be completed by a pre-determined date.
In the day-to-day operations of real estate, the real estate agents rarely receive a copy of the appraisal, so arrangements for the buyer to secure a copy must be made between the buyer and the lender.
on the lighter side
The trouble with owning a home is that everywhere you sit, you’re looking a something that needs doing.
SHAMELESS PLUG
List with me and your internet exposure is not limited to realtor.com. Call me at 252-939-2432 or email me at kriggs@kathyriggs.com
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