Earlier I wrote about due diligence when purchasing a home. This article is about the appraisal and the contingency that is tied to it when a buyer puts an offer in on a home purchase. Once both sides agree on the price and all of the terms and conditions of the purchase and sales agreement and both parties to the transaction have signed the agreement you have a binding agreement. The clock starts ticking on the due diligence and the appraisal contingency and any other contingencies from that point going forward. Typically this contingency period is from fifteen to twenty days.
An appraisal gives lenders, sellers and potential buyers an objective measure of a given home’s value, which allows for a more accurate selling price. All lenders require an appraisal on any property purchased through borrowing funds from a financial institution. Regardless of financing a home purchase or paying cash, we advise all purchasers to obtain a new appraisal for any real estate transaction. In order for the lender to approve the loan the appraised value must be equal to or above the contract price of the home.
We often have sellers ask what can they do to prepare for their home appraisal. Prepare your home like you would for a buyer’s visit, and then don’t sweat it. Many of the things on the appraiser’s checklist are things you cannot change -- size of the home, location, number of rooms, recent sales data, etc. You have no control over these factors. They are what they are. So you shouldn’t worry about that side of things.
When we talk to sellers we always talk about positive thoughts and comments regarding your home when a buyer comes to visit. The same holds true for an appraiser: maintain your curb appeal, keep it neat, keep it clean, and repair any code or safety issues. If you have used a REALTOR to sell your home, your sales price should be in the range of where the appraisal will fall.
Typically your REALTOR does not chose or pick the appraiser who will perform this service for your home. It is the lender who orders and calls for an appraisal, if the home purchase is financed. There are times when we would suggest the seller getting an appraisal prior to listing their home. Usually these are in areas where comparables are far and few between for us to give you an accurate reflection of your homes value. In other cases the property is very unique in different ways. In this case we always suggest or recommend a seasoned and licensed appraiser where he or she is very familiar with your neighborhood and product type.
From Savannah List for Less, our home to yours, we wish you a very Merry Christmas and Happy Holidays. Hopefully it is time spent with family, loved ones and good friends.