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Home Buyer Series Part III: The Appraisal Contingency

There are many misunderstandings about home value and how it’s figure is determined. Many factors are involved, including recent home sales in the neighborhood, economic factors and demographics within the area, and of course, the condition of the property.

The appraisal contingency gives the home buyer enough time to have the value of the home they are purchasing assessed by a professional appraiser. In a normal or standard sale, it is typical for the seller to pay for the appraisal.

The appraisal is important for many reasons:

One, it provides an official value of the property.

Two, it provides the lender with an accurate dollar figure when it comes to putting together the buyer’s mortgage loan. The lender will fund only the appraised value of the property.

Three, the buyer will know the professionally determined value of the property they are purchasing. The contingency gives them some options. For instance, if the appraised value of the property comes in lower than the price they offered, they have the option of negotiating the price with the seller to match the appraised value, or they can opt out of the purchase.

Appraisals are required when the buyer is borrowing money from a lender to purchase the home. They are not required if the buyer is paying cash, but it is always strongly advised to have one done anyway.

For more information on appraisals, or if you have questions about the home buying process in general, don’t hesitate to contact us by going to http://bringingyouhomescv.com, or call us directly at 661-290-3802.

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