So who orders the appraisal? Your mortgage lender is the person who orders the appraisal, but may call you to get your card number at some point to pay for the appraisal. Generally the cost is somewhere between $300-600 and is considered part of your "closing costs", even though you pay for it upfront.
Here are a few things to know about the appraisal:
- You aren't required to attend
- Buyers Realtor does not attend, only the Listing Agent attends.
- Once the appraisal is ordered/paid for, it will normally take about a week for the appraiser to come out and perform the appraisal. It will then take him some time to compile and write the report. This process can be about 2 weeks to complete.
- When the report is written, they will give it to the lender and listing agent. This report most likely will not be shared with us on the buying side, but we will be informed whether the property "appraised".
- If the property appraised, AWESOME! This means we passed this "checkpoint" and nothing further needs to be done.
- If the property appraised for more than purchase price, this means you will have instant equity the day you move in!
- If the property did NOT appraise, now is where we need to negotiate (like the home inspection) because lenders will only give you a loan for the appraised value. Depending on the case, we can go back and renegotiate purchase price down with the sellers, ideally to the appraised value. If they won't budge on the pricing, then we can either walk away and retain our earnest money or bring the additional funds to closing. For example, if the offer price is $400k but the appraisal came in at $380k and the sellers won't go any lower than $385k - you have to decide if you're going/able to bring the extra $5k on top of your down payment and closing costs to the closing table, or we walk away from the deal.