No one expects you to be able to appraise a house. It’s a professional’s responsibility to provide an independent estimate of either your 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. If the bank has approved you for a loan that is 95% of the loan to value of the home and the appraisal comes in short of the agreed upon sale price, there is going to be a big problem. Sometimes the agreed upon sale price needs to be adjusted, or the buyer needs to make up the difference with their own money, or the whole deal falls apart. None of these are very happy situations.
There are a few things to keep in mind, however, to make the best use of the cost of a professional appraisal. While your lender usually selects the appraiser, be aware that as the buyer, federal law guarantees you a copy of the appraisal report, and you should insist on receiving it. Many appraisers have a MAI or SRA designation from the Appraisal Institute. This proves they have at least 200 hours of training and two years of practical experience.
Remember that an appraisal is an opinion of value. You could have five appraisals with five different values. The only appraisal that really counts is the appraisal that is completed for your lender. This is the one that determines if there is going to be a happy ending. And of course, everyone loves a happy ending!
Contact the Kathy Henne Team RE/MAX by calling 937-778-3961.
Contact the Kathy Henne Team RE/MAX by calling 937-778-3961.
