Picture this: You’ve found your dream home—the one with the perfect kitchen, a backyard big enough for a dog (or two), and neighbors who seem like they’ll let you borrow a cup of sugar without judgment. You’ve signed on the dotted line, the seller’s said yes, and you’re mentally picking out curtains. But before you can officially call it yours, there’s one crucial step left: the appraisal.
Let’s break down when the appraisal happens, who pays for it, and why it’s the unsung hero of the home-buying process… with a few chuckles along the way.
So, When Does the Appraisal Happen?
The appraisal doesn’t show up right at the beginning, and it’s not the last thing on your to-do list either. It happens after you and the seller agree on a price but before your lender gives the final thumbs-up for your mortgage. Think of it as the referee in the middle of a friendly soccer match, making sure everyone’s playing fair.
Here’s how it works:
- Offer Accepted: You’ve made an offer, the seller’s accepted, and you’re officially under contract. Cue the happy dance.
- Lender Steps In: Your lender wants to make sure the house is worth what you’re borrowing. After all, they’re the ones fronting the cash. They order the appraisal to confirm the home’s value aligns with the agreed-upon price.
- Appraisal Scheduled: A licensed appraiser visits the home to check its condition, size, location, and other factors. They’ll also compare it to similar homes (a.k.a. comps) that have recently sold in the area. It’s kind of like the home’s report card.
- Appraisal Report Delivered: Within a week or so, the appraiser sends their report to your lender. This is the moment of truth: Is the house worth what you’re paying?
Pro Tip: Be patient! While waiting for the appraisal might feel like watching paint dry, it’s an essential part of ensuring you’re making a smart investment.
Who Pays for the Appraisal?
If you’re hoping the seller will pay for this one, I’ve got some tough love: Appraisal costs typically fall on the buyer. That’s right, you’re picking up the tab for this real estate rite of passage.
But don’t worry—this isn’t a “just because” expense. Here’s why paying for the appraisal is actually a good thing:
- It Protects You: The appraisal ensures you’re not overpaying for the home. If the appraised value comes in lower than the purchase price, you’ve got options (and leverage) to renegotiate.
- It Protects the Lender: The lender needs to know they’re making a sound investment. They’re not going to give you $300,000 for a house that’s only worth $250,000. Makes sense, right?
- It’s Part of Closing Costs: The appraisal fee—usually between $300 and $600—is included in your closing costs. While it might feel like a surprise expense, it’s part of the bigger picture.
What Happens If the Appraisal Comes In Low?
Ah, the dreaded low appraisal—it’s like finding out the fancy dinner you just ordered isn’t on the house after all. If the appraised value is less than the agreed-upon price, you’ve got a few options:
- Renegotiate: Ask the seller to lower the price to match the appraisal.
- Pay the Difference: If you’re head-over-heels for the house, you can cover the gap out of pocket.
- Walk Away: If neither of those options works, you may be able to back out of the deal without losing your earnest money.
Fun Fact: Low appraisals aren’t super common, but they’re not unheard of. Your agent (hint: Michelle Starkey!) will help you navigate the situation like a pro.
Why Appraisals Are Worth It
Appraisals might not be the most glamorous part of buying a home, but they’re one of the most important. They ensure everyone’s on the same page about what the house is worth, protecting both buyers and lenders from overpaying. So, while you’re waiting for the report, just remember: This is one of the final steps before you’re holding those keys!
