If you, like most people when buying their home, are obtaining a loan to pay for it – they will require an appraisal to determine the worth of the home.
How does the appraiser decide the value?
The appraiser is going to measure the house, check the property condition, possibly looking the attic, and note any extra features that would add value. After that, they compare your house to other comparable properties that sold in the neighborhood. Value is reduced and added based on what the other properties sold for and what their amenities were.
My friend’s house sold for 50k more last year!
Appraisers typically only look through the last 6 months of sales in your neighborhood. They will look back at older sales if your neighborhood doesn’t have a lot of activity or if your property is extremely unique.
Can I ask the appraiser to change something?
Not really. You can dispute the appraisal though. Maybe they missed a property that would be a great comparable to yours. Your agent can reach out and offer them that info to help change the appraisal, but it’s not always successful.
My house is worth more because of the stainless steel appliances!
Wellllll…… that’s not how it works. In your purchase agreement it says those appliances you’re leaving for the buyer don’t add any value to the house.
What happens if the appraisal is lower than the purchase amount and the appraiser won’t change the value?
That’s when you present the appraisal to the sellers and ask them come down on their price. If they do not agree to a price drop, you can decide to walk away from the deal and get your deposit back.
What if the appraisal comes in for more than what I’m buying it for?
AWESOME! You now have equity in your home!
Can I pick who the appraiser is?
Nope. The bank doesn’t even pick who goes out to evaluate the home. They put in a request and it’s a round robin system. They want appraisers to be impartial.
Be mindful that the appraiser has a copy of your contract and knows how much you’re buying the home for. Low appraisals are not the norm. If this was to happen, let your experienced New Orleans real estate agent guide you!
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