Here’s what homebuyers (and sellers) should know about home appraisals.
Today we’re going to look at what an appraisal is and how the appraisal process works. Essentially, an appraisal happens when a bank/lender sends a third-party appraiser to a home their buyer has made an offer on to determine its value and ensure that the purchase price and the loan amount are aligned. This is one of the most important parts of a transaction for several reasons.
For buyers, the appraised value must be at or above the purchase price. Let’s say the purchase price is $200,000 and the appraisal comes back in at $190,000. In this case, the $10,000 needs to be made up to get the deal done. The seller could reduce their price, the buyer could increase their cash, or they could meet somewhere in the middle.
Appraisals are incredibly important to every financed real estate transaction, and you need to be prepared for low appraisals as a buyer or seller in this market.
If you have any questions for me about buying or selling a home in Phoenix, please don’t hesitate to reach out via phone or email. I look forward to hearing from you soon!