Lender Appraisal

Before you can buy a home with a loan the lender needs and objective assessment of the property’s value from a professional appraiser. The lender needs to ensure that the loan is not more than the property is worth, after all the home is the bank’s collateral for the loan. Appraisals also can protect Buyer from overpaying for a home but they do not guarantee the homes condition.

The Real Estate Appraisal Process usually takes several hours and starts with a detailed physical inspection of the exterior and interior of the property being appraised. The appraiser documents the inspection in a written appraisal report. The appraisal report derives  an appraised value and includes comparisons to similar local property’s  that have recently sold , known as comparable, or “comps.”

Several options exist if an appraisal comes in low:lender appraisal
1.) The Buyer can make up the difference in cash
2.) The Seller can lower the purchase price
3.) The Seller can offer to carry a second mortgage for the difference
4.) A second appraisal can be ordered
5.) A list of comparable sales can be sent to the underwriter to reconsider
6.) The Buyer may solicit a loan from a different supplier
7.) The transaction maybe cancelled and earnest money be distributed