Congratulations! If you’ve gotten this far it means you’re under contract and have dropped off your first earnest money check. Now it’s time for the appraisal.
The Appraisal Process
Who Orders the Appraisal?
- Mortgage Lender: Orders the appraisal on your behalf.
- Payment: Your lender will contact you to provide your credit card details to pay for the appraisal, typically $350–$500. This amount is part of your closing costs, though paid upfront.
Important Tips About the Appraisal
- Attendance:
- You and your Realtor do not need to attend.
- The seller’s Realtor attends the appraisal.
- Timeline:
- After payment, it typically takes 1 week for the appraiser to visit the property.
- The written report is usually completed 1 week later, so expect about 2 weeks from payment to receiving the report.
Outcomes of the Appraisal
- Appraised at Purchase Price
- Great news! The process moves forward without additional steps.
- Appraised Above Purchase Price
- Congratulations! You’ve secured instant equity in your home.
- Appraised Below Purchase Price
- Implications:
- The bank will only lend based on the appraised value.
- Next Steps:
- Renegotiate: Work with the seller to reduce the purchase price to match the appraisal.
- Options if Sellers Don’t Lower the Price:
- Walk Away: Get your earnest money refunded.
- Cover the Difference: Bring additional funds to closing to cover the gap.
- Example: Purchase price is $500K, appraisal is $470K, and the seller won’t lower below $480K. You’d need to bring an extra $10K to closing.
- Implications:
If you have any concerns or questions during the appraisal process, let us know!