7. Appraisal

• The contract will stipulate who pays for the appraisal, the buyer or the seller. It is a negotiable item. If it is a buyer cost, you will need to write a check to your lender by the date set in the contract (and I'll tell you when). The appraisal is ordered by your lender and the lender owns the appraisal report.
• The appraiser sets the value of the property. He or she uses several different methods to determine value. One method includes the use of comparable properties and what they've recently sold for, another is the cost to replace the property.
• Our desire is that the value set by the appraiser matches or exceeds the sales price. If the appraisal comes in below the sales price, then we must either renegotiate the contract or you must come up with enough cash to cover the deficiency or you may back out of the deal.
• The appraisal is usually the last step before the loan package goes to underwriting and then we close.

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