Who does the Appraisal Really PROTECT?

Real Estate Agent with Homebuyer Representation, Inc. DRE# 5467433

Most Utah Homebuyers believe that the appraisal is being done to protect the Buyer. Although it may ultimately do so, the appraisal is really done in order to protect the lender. Appraisers are hired to protect the Buyer's lender(s). The main part of the appraiser's job is to determine if there is enough collateral value in the property to protect the lender's lien-holder position (risk).

In some markets, appraisals may be routinely performed before presenting offers. However in Utah, the appraisal is typically ordered after a contract price has already been agreed to. In this case, most Buyers will (should) include an appraisal contingency in their offer, which will allow them to have the option of cancelling the contract and getting back their earnest money in the event the home appraises for less than the contract price.

Buyers should NOT rely on a past appraisal value in determining how much they will pay for a property. Sellers or their agents will sometimes promote that a property was recently appraised for thousands (or tens of thousands) more than the asking price. Those appraisals are usually done for the purpose of securing a home-equity or consolidation loan  and are very different from an appraisal which considers the value of a property to secure a first mortgage. Unless you choose to structure your offer otherwise, the EBAs at Homebuyer Representation will help make sure that you are protected in the event that a property appraises for less than your contract price.

Remember Exclusive Buyer's Agents do not list homes and will not ask you to limit your level of representation. They will be 100% on your side during the transaction, representing YOU, negotiating on YOUR behalf and protecting YOUR interests.


Smart Home Buyers

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  • Do you have a good down payment, or are you paying cash for your next home?
  • Do you want an agent on YOUR side throughout your transaction?
  • Do you have questions about buying a home in the Salt Lake area?

Don't leave things to chance. Get YOUR OWN agent!

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