Congratulations! If you’ve gotten this far, it means you’re under contract, have dropped off your deposit check, and have successfully negotiated repairs. Now it’s time to order the appraisal. We will contact your lender and let them know it’s ok to start the process now.
Who orders the appraisal?
Your mortgage lender is the person who orders the appraisal and will call you to get your credit card at some point soon to pay for the appraisal if they haven’t done so already. Generally, the cost is between $450 – $600 and is considered part of your closing costs, even though you pay for it upfront.
Here are a few tips about the appraisal:
- You do not need to attend.
- The buyer’s Realtor does not attend either.
- Once you pay for the appraisal, the lender will contact the Appraisal Management Company to order the appraisal. It generally takes about a week before the appraiser comes out to conduct the appraisal. (Depending on their schedule, of course.) After the appraisal is performed, it usually takes another week or so for the report to be written. Expect it to take about two weeks from when you pay for the appraisal until you receive the report.
- Once the report is written, it is sent to your mortgage lender. Your mortgage lender will then forward it to you and let you know whether the property appraised at the purchase price, below the purchase price, or above the purchase price.
- If the property is appraised at the purchase price, nothing more is needed, and the closing process will proceed as planned.
- If the property appraised for more than the purchase price, congratulations! That means we got you a great deal, and you’ll have instant equity in your home on the day you move in! Neither the seller nor their agent will receive notification of the higher appraisal price.
- If the property is appraised for less than the purchase price, we have a problem. That means the bank will only give you a loan for the appraised value. In this case, we then renegotiate the purchase price with the sellers, ideally to the appraisal price. We will have to send the seller a copy of the appraisal with our request to reduce the purchase price. If they won’t come down to the appraisal price, you can either walk away and get your deposit back or bring the additional funds to closing. For instance, if the purchase price is $500K, but the appraisal only came in at $475K, and the sellers won’t go any lower than $480K, you have to decide if you’re going to bring an extra $5K on top of your down payment and closing costs to closing or walk away from the deal.