The Appraisal Process
When a buyer is obtaining financing to purchase a home the bank wants to ensure the home is worth the money they are lending to the borrower. Makes sense….right? So after an agreement of sale is signed and the buyer has completed the mortgage application, an appraiser will go out to the home and evaluate the condition. From there the appraiser will look at bedrooms, bathrooms, square footage, location, lot size, and compare the home to other like homes that have recently sold in the area.
So what does Recently sold mean?
Recently, sold means within the last six months. And if you are in a development, the appraiser will try to stay in that development to find like comparables.
In the end, the appraisers are the real determiner of value. We could have someone willing to pay $400K for a home, but if the appraiser says it’s worth $350K then that is all the bank is going to lend on it.
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