Step 12: The Appraisal Process
If the buyer is using a mortgage to buy your home then the lender will require that an appraisal be conducted. So, what is an appraisal? Read this blog post to find out!
Who orders the appraisal? The buyer’s mortgage lender orders the appraisal, and it is a cost to the buyer.
When does the appraisal occur? It is ordered once the home inspection contingency is released and buyer and seller have come to an agreement on any repairs needed.
Do I need to attend the appraisal? No, you will not attend the appraisal. Appraisers are members of the Omaha Area Board of Realtors and can access your home using the e-key system. This appointment will be set with you in advance.
How long does the appraisal take? The appraisal usually takes about one hour depending on the size of the home.
How long until we know if the property appraised for the purchase price? We will know within 7-10 days after the appraisal appointment. Once the report is written, the buyer’s mortgage lender forwards it to the buyer only.
- If the property appraised at the purchase price, nothing further needs to be done and the closing process will proceed forward as planned.
- If the property appraised for more than the purchase price, we will not be notified. The appraisal belongs to the buyer, and is not shared with the seller. The only exception would be information regarding repairs required by an FHA or VA appraiser. They would need to share that specific information with us, as those repairs would need to be completed prior to closing.
- If the property appraised for less than the purchase price, we have a problem. In this scenario, the bank will only approve a loan for the appraised value. At this point, the buyer will come back to us to renegotiate the purchase price to the appraisal price. We have a few options:
- We can dispute the appraisal by providing information that we feel supports the price. This is rarely accepted because appraisers rarely change their initial report.
- Reduce the amount of any closing costs that you are paying on the buyer’s behalf so that we can reduce their price.
- Reduce the price and leave all other terms in place.
- Request that the buyer bring the additional funds to closing. This is highly unlikely. If this cannot be resolved, it is likely that you will lose the buyer. You must be very cautious because you will be gambling on the hopes that the next appraiser will report a higher value which is also unlikely.
Questions? Feel free to contact us at 402-415-4799 or via firstname.lastname@example.org