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| 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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