You're under contract on your Springfield VA home and the lender has ordered an appraisal. What's that mean to you? The reason for an appraisal is so the lender can justify their investment in the home. At the same time the lender is looking to justify their investment you are also looking to make sure you are not overpaying for your new home.
The Virginia Regional Sales contract spells out specifically what happens when an appraisal is completed. If the appraisal comes in at the sales price or above then it is clear sailing for everyone. However if the appraisal comes in low there are a few options.
You can agree to move forward at the contract price and pay the difference between the sales price and the appraised value out of your own pocket.
You and the seller can negotiate a compromise still leaving you with additional money required to close.
The seller can lower the sales price to the appraised value.
You can terminate the contract.
In most circumstances in today's Springfield VA real estate market the seller will lower the sales price to the appraisal value. Occasionally the difference is to big for the seller to be able to accept the lower price, perhaps it forces them to bring money to the table and the deal ends. If that happens your earnest money deposit (EMD) is returned to you with no questions asked.
Do appraisers ever make a mistake? Yes occasionally they misread or miss a comp. As the buyer you will be provided a copy of the report and can appeal the value if it looks as if it will kill your deal. If we find an error we can ask for the appraiser to submit and updated appraisal. The lenders underwriter is going to review to make sure it's right.
Once this final hurdle is crossed and you have all your documents completed with your lender, your loan approval will be final.
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