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 seller cost, you will need to write a check to the buyer's lender by the date set in the contract (and I'll tell you when). The appraisal is ordered by the buyer's lender and the lender owns the appraisal report. They may choose not to share this with anyone.
• 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.
• If the appraisal comes in below the sales price, then the contract will be renegotiated or possibly voided, depending upon how it is written. The appraisal may call out items for repair. The property will not close until these repairs are accomplished. That's just the way it is.
• The appraisal is usually the last step before the loan package goes to underwriting and then we close.

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