By Kathy Henne

Contributing columnist

No one expects you to be able to appraise a home. It’s a professional’s responsibility to provide an independent estimate of either your current home’s value, or the value of a home you are interested in purchasing.

While the bank uses the appraisal to guarantee your home’s tangible value against the mortgage, such documentation also ensures that you’re not overpaying for your dream home.

There are a few things to keep in mind, however, to make the best use of a professional appraisal. While your lender usually selects the appraiser, be aware that federal law guarantees you as a buyer, a copy of the report, and you should insist on it. Your lender will probably choose a professional with an MAI or SRA designation from the Appraisal Institute. This proves they have had a least 200 hours of training and two years of practical experience.

Keep in mind that an appraisal is simply an opinion of value. You could pay for five appraisals and end up with five different values. Some sellers consider having their home appraised before they list the property. However, the only appraisal that counts is the appraisal ordered by the buyer’s lender.

If the bank’s appraisal comes in lower than the contract price, your deal may be dead in the water. If the contract price is $105,000 and the appraisal comes in at $100,000, the buyer would need to come up with another $5,000 or ask the seller to reduce the contract price to the appraised value. The buyer may not have the extra money to invest in the property. As a seller, you may be able to request, and of course pay for, a second appraisal in hopes that it will come back at a higher price. The bank may or may not agree to this, but it doesn’t hurt to ask.

Contact the Kathy Henne Team RE/MAX by calling 937-778-3961.