It’s not an appraisal, it’s a mortgage valuation

It’s not an appraisal, it’s a mortgage valuation or at least that is what they should call it.  Home buyers need to understand this is part of the home buying process that so many people misunderstand.  It is important for home buyers as well as home sellers but for different reasons.  Both have the same end goal, putting the sale together.

Lets start with the home buyers.  Please keep in mind if you are looking for validation that you got a great deal on the home you are buying, please don’t look for it in this part of the process.  If you are concerned about the value of the home you are buying, you should have already established that with your agent when looking over all of the comps and stats before you made the offer.  The appraisal is more for the bank to establish that the amount of the loan is equal to the value of the property.  Because of this fact rarely does the appraisal come back for more than the purchase price.  It doesn’t necessarily reflect the true value of the property just the value of the loan.  So when the appraisal comes back for the purchase price be happy because you are get the loan for your new home.

For you home sellers the value of the appraisal coming back for the purchase price means you have your home sold.  You have to be aware that this is really important to have an agent representing you that will make sure they meet the appraiser or prepare a package for them ahead of time.  The appraiser will make their own determination but most are always willing to hear about the home and all of its upgrades and features.  Along with that other sold properties that the agent has used along the way during your listing cycle to show them how the agent watched the market and kept your home positioned in the correct spot to get it sold.  If you have an agent who doesn’t bother to do this task the results can be bad.  You never know if that appraiser is from the area or is from 50 miles away.  Anything your agent can do to help the appraiser by sharing information will go along way to the appraiser using the correct information when doing their appraisal.

Tom Sommers/Edina Realty