Last updated on October 29th, 2021 at 08:30 pm

Last Updated on October 29, 2021 by

Real estate agents know that there is a difference between an appraisal of a residential property and a selling price they can provide. Only a state-licensed appraiser can produce a report with a recommended value. Real estate agents deal with market pricing and there are often differences. A Real estate agent can not create a legal appraisal to start and an appraiser does not recommend a purchase price.

I could go into some depth here about the concept but there is a great article “About that home appraisal” on this website that will go into more of the mechanics and results of appraisals that do not match up with the sellers asking price.

In an ideal world, a real estate agent will arrive at a selling price recommendation that will be at or below what the appraiser determines is a value. If the appraised value comes in below the contracted purchase price, the mortgage company will not fund the loan until one of several things occurs. The contract price must align or it can be lower than the appraised value.

All of us in the real estate business “hope” that the appraisal comes in at or better than the selling price but we never know. Agents nor lenders can influence the process until the actual report comes in. The lender who ordered the appraisal can ask for a review if they choose to do so. This does not happen often.

FYI, appraisals cost about $650 more or less and the buyer is usually responsible for this cost. The lender will order the appraisal and ask the buyer to pay for it, usually with a credit card. Expect to pay for this right after it is ordered. If you back out of the deal you can not get a refund.

It is not much you can do to prepare for an appraisal since this is not a home inspection. The appraiser will look at the property and its general condition will be noted but they do not spot inspect infestation or check the quality of the flooring. An appraisal is more about comparing your home to others within some fairly strict parameters.

If your home is in an outstanding condition that may influence the appraiser to add a bit to the appraisal but it would be only one factor among many.

You should read our more extensive article as mentioned above for more information and real-life experiences. You can also visit an article at the FHA for even more information about the appraisal.

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