Whether you are buying or selling a home, it’s important to learn and understand the transaction process. By doing so, you’ll know what to expect and be able to allot the right amount of time to getting each step done right. An important and unavoidable piece of the puzzle is the appraisal process. If you are planning on buying or selling soon, there are certain things you should know before jumping in.
It’s important to realize that appraisals take longer than they did in the past, therefore, extending the entire transaction by a couple of weeks. After the passing of the Home Valuation Code of Conduct in May of 2009, your mortgage company can’t hire its own appraiser. “When independent, third-party appraisal management companies come into play, it typically adds time to the process,” says Mary Lynn Stone, President of Century 21 New Millennium. “It’s important to know that this is normal, but also that it must be expected.”
Consumers can also expect a price increase, with some appraisals reaching as high as $500. “Make sure to find an appraiser that knows your area and its trends. That way, even if you end up paying a couple hundred more, the value of your appraisal will be more beneficial to everyone involved,” says Stone.
Buyers in this market may find themselves at an advantage thanks to the appraisal process. Due to a not-yet-fully-recovered market and the influx of foreclosed homes, appraisal results may come in much lower than expected, much to the seller’s chagrin. The chances are that an appraiser may low-ball the value of the house, saving you, the buyer, thousands of dollars on the purchase price of the home. Keep this in mind, as the scales are probably tipped in your favor.
For sellers, this places additional importance on finding an appraiser that knows your market area. To curb this disadvantage, sellers should be sure to be present and ready to answer any questions the appraiser may have. “Let the appraiser know that you are available to answer any questions he or she may have,” says Stone. “Walk through the home with the appraiser. If you’ve made any repairs or upgrades, now is the time to make that clear.” Doing so could make a huge difference in the results.
The appraisal process is an inevitable part of the transaction process. By being educated on how it works and what to expect, you can ensure that your transaction runs as smoothly as possible whether you’re buying or selling.
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