This isn’t an important date in the contract but it’s one of the last steps before you can close. Keep your head up, you’re almost at the finish line!
So, we’re past the earnest money, past the loan applications, the headache of a due diligence period. Next comes the final financing pieces. The Lender has collected all your info, you continue to submit bank statement after bank statement and it feels like the end must be near. Good news, it is!
The bank/Lender company wants to know lending you money is a good idea. How do they do that? By getting a third party’s opinion, aka, the appraiser. The Lender will submit a request for an appraisal on their fancy lending software. The request gets received by a coordinating company, and they send the request to an individual appraiser. The appraiser gets the request and starts to collect information on the property. They have a copy of the Purchase & Sale and its addendums (single dwelling, multi-family). They search public records (lot acreage, zoning). Then, they’ll contact the Listing Agent for access to the property.
Appraisal appointments typically only take about 15 minutes. The appraiser will do a walkthrough around the exterior of the property and around the interior. They’ll have a sturdy clipboard to make notes about the property. They’re verifying the number of bedrooms, bathrooms, and square footage. They’re looking at the driveways, porches, energy-efficient upgrades. They’re checking out the kitchens and bathrooms for updates and surface materials. They’re down in the basement making note of the crawlspace, are there a ton of spiders? Just kidding. But seriously, it’s good to have everything in ship shape when they come around.
The appraisal report will be this crazy busy spreadsheet of numbers and letters, your head will spin just looking at it. However, it helps organize factual information from an unbiased third party so the lender feels better about giving you hundreds of thousands of dollars.
If the appraisal report comes in (is received by the lender) and is not sufficient (is appraised below the purchase price) then everyone gets to renegotiate again! …Yay. Basic questions to consider: Are Buyers willing to pay in cash to make up the difference? Are Sellers able to lower the purchase price to meet the value of the report?
Assess where you are, what you want, and what you’re willing to do to keep the deal together.