First off, appraisers are not bad. Some may be big, but the majority are not bad. These people work to protect the lender—not the buyer or seller. Both buyers and sellers need to be aware of how an appraisal can impact your transaction. Whether you are using a Realtor to buy or sell your home or if you are representing yourself, which of course I do not think is your best option, please protect yourself from an appraisal that does not meet or exceed the agreed upon sales price.
How To Protect Yourself
If you are a buyer and you are putting more than 20% down you may not be protected, at least in Frisco or other areas of Texas, if your appraisal comes in lower than the sales price. The lender may still approve the property and you may be stuck paying the full price of the home. Your financing "out" of not being approved may be gone. This is where you need to know how to write an addendum to the contract which protects you from the under appraisal.
If you are a seller and you receive offers above your home's value you will need to understand the financing of the offers in order to determine which one will give you your best success and best odds to close. I did not say provide you the most profit as that may not be your number one concern when selling your home. If you decide that you wnt to sell your home for $350K and you receive offers of $355K, and two for $360K there are certain things you should understand. First congratulations! Then start looking at the strength of each offer. If your house only appraises at $353K how would each of those offers play out. WHich one will agree to bring more to the table than the appraised value? How do you protect yourself from having to re-list your home on the market?
A well educated and experienced Realtor® should be able to answer these questions efficiently and effectively. Ask questions and find out how they are protecting you as a buyer or seller. If you are doing this on your own, think twice. Ask for assistance. This is one of your largest investments ever. Are you comfortable with this situation?
Click here for more information about appraisals in Texas and other areas. If you are looking to buy or sell your home in North Texas, please give me a call and find out what my other clients know: Your Success is My Focus