Appraisal
While you are working through your Colorado home buying process, the lender is also working alongside of you to close your loan. Part of their job is to schedule the appraisal. You might be wondering, what exactly is a home buying appraisal?
Your mortgage lender is the person who orders and schedules the appraisal, but you are responsible for the cost of the appraisal. Generally the cost is somewhere between $350 – $700 and is considered part of your closing costs, even though you pre-pay for the appraisal. Often, your lender will call you and ask for a credit card for payment.
A few tips about the appraisal:
Most often, no one except for the appraiser themselves will attend the appraisal.
Once you pay for the appraisal, it generally takes about a week before the appraiser comes out to conduct the appraisal. After that it usually takes another week or so for the report to be written. Expect it to take about 2 weeks from when you pay for the appraisal until you receive the report.
Once the report is written, it’s given 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 appraised at the purchase price, nothing further needs to be done and the closing process will proceed forward 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!
If the property appraised for less than the purchase price, there are a few ways forward. One outcome is that we can go back and renegotiate the purchase price down with the sellers, ideally to the appraisal price unless there was appraisal gap coverage included in the contract Learn more about appraisal gaps. If they will not agree to lower the price to the appraised value, then you can choose to either walk away and get your earnest money back or bring additional cash to closing so that you can obtain the loan. 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.
Questions? Reach out to the Appreciate Realty CO agent you are working with directly or Call/Text us at (303)956-4948 or email us at hello@appreciaterealtyco.com