Selling your home can be profitable in today's seller's market as home values have risen significantly this year. What's taken many sellers by surprise this year, however, is that some homes haven't been appraising due to these higher sales prices. Here are a couple of tips on what to expect during an appraisal.
Who Orders the Appraisal?
Your buyer's mortgage lender is the appraiser's client so your buyer's bank or mortgage company orders the appraisal. Sometimes they order the appraisal directly from a licensed residential appraiser, or they may use an appraisal management company (AMC) to facilitate the appraisal process, which includes ordering the appraisal. The mortgage lender has financial interest in your home which your buyer is purchasing. That's why neither you nor your buyer is the appraiser's client. According to the National Association of Realtors, your buyer will receive a copy of the appraisal, per the Equal Credit Opportunity Act (ECOA), but you won't. Your real estate agent or attorney could find out if your home appraised for at least the price on the contract. That's all that should really be important to you.
When Does the Appraisal Take Place?
The appraisal can take place any time after your buyer has completed the mortgage application and submitted all required documents. Your buyer's entire loan contingency relies on the application, your buyer's supporting documents, the appraisal, and sometimes other documents such as homeowner's association documents. At times, buyers will do their inspection first to be sure they want to proceed with purchasing your home. Don't be surprised if the appraisal is ordered right away or if it takes a couple weeks.
What Does the Appraiser Do?
The appraiser will research before visiting your home. She will review the sales contract and investigate homes that are comparable to yours. When it's time for the in-person appraisal, she will contact your real estate agent to make the appointment. You should ask your agent to be present at the appraisal. You do not have to be there, however. The appraiser will walk around the exterior of your home and take measurements. She will also take measurements of the interior rooms as well as take notes on the amenities, upgrades and updates of your home as well.
How Can You and Your Real Estate Agent Help?
You and your real estate agent can help by putting together an "appraisal package." In this package you can include documents such as the survey, homeowner's association documents, information about the neighborhood or subdivision, a list of upgrades and updates you've made to your home and so on. Ask your agent for a list of what papers to gather. You can also both help by answering any questions the appraiser might have.
How Long Before You Are Informed About the Appraisal Results?
With low interest rates, many homeowners are either selling or refinancing right now keeping appraisers very busy. It may take a week or more for your buyers to receive the appraisal results. This may be an unnerving time for you, awaiting results, especially if you sold your home for more than asking price or were really aggressive with your list price.