Colorado Springs Real Estate Contract Guide – Appraisal
Most home purchases require a mortgage (statistically about 95%). If a loan to purchase a home is being used, an appraisal is done to ensure the home is worth at least as much as the purchase price. If the appraisal does not come in at least as high as the purchase price of the home, a bank will ask the buyer to make up the difference or will not fund the loan. Buyers will almost always attempt to renegotiate with the seller to reduce purchase price to the appraised value.
If an agreement to eliminate the discrepancy between purchase price and appraised value is not reached, and the buyer stayed within their specified time frame, the buyer may terminate the contract without penalty.
Timeline- Typically about 3-4 weeks BUT if you are using VA financing there is no date. The appraisal will be binding whenever the government gets around to appraising the home.
Colorado Springs Real Estate Buyers:
Try to get your inspection done quickly and ask your lender to wait to order the appraisal until you give the go ahead. You don’t want to pay for an appraisal on a house you don’t want. Appraisers are crazy busy anymore and if your appraisal doesn’t come in before the date specified in the contract, you may lose your ability to object which means if you want/need out of the contract, you will not get your earnest money back.
Colorado Springs Real Estate Sellers:
Be sure YOUR Realtor meets the appraiser and provides them with comparable sales data as well as a list of upgrades you have done to the home while you have owned it. You should insist on this because helping the appraiser justify the price of your home is part of your Realtor’s responsibility to look after your financial well-being.
If you have a specific question not covered on this site, please contact me.